Correlation Between Mahkota Group and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Mahkota Group and Kalbe Farma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mahkota Group and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahkota Group Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on Mahkota Group and Kalbe Farma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mahkota Group with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahkota Group and Kalbe Farma.
Diversification Opportunities for Mahkota Group and Kalbe Farma
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mahkota and Kalbe is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mahkota Group Tbk and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and Mahkota Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mahkota Group Tbk are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Mahkota Group i.e., Mahkota Group and Kalbe Farma go up and down completely randomly.
Pair Corralation between Mahkota Group and Kalbe Farma
Assuming the 90 days trading horizon Mahkota Group Tbk is expected to generate 1.42 times more return on investment than Kalbe Farma. However, Mahkota Group is 1.42 times more volatile than Kalbe Farma Tbk. It trades about 0.0 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.04 per unit of risk. If you would invest 71,500 in Mahkota Group Tbk on September 1, 2024 and sell it today you would lose (4,500) from holding Mahkota Group Tbk or give up 6.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mahkota Group Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Mahkota Group Tbk |
| Kalbe Farma Tbk |
Mahkota Group and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mahkota Group and Kalbe Farma
The main advantage of trading using opposite Mahkota Group and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahkota Group position performs unexpectedly, Kalbe Farma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Mahkota Group vs. Austindo Nusantara Jaya | Mahkota Group vs. Garudafood Putra Putri | Mahkota Group vs. Provident Agro Tbk | Mahkota Group vs. Dharma Satya Nusantara |
| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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