Correlation Between Mustika Ratu and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu 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 Mustika Ratu and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustika Ratu Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on Mustika Ratu 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 Mustika Ratu with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Kalbe Farma.
Diversification Opportunities for Mustika Ratu and Kalbe Farma
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mustika and Kalbe is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu i.e., Mustika Ratu and Kalbe Farma go up and down completely randomly.
Pair Corralation between Mustika Ratu and Kalbe Farma
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to under-perform the Kalbe Farma. In addition to that, Mustika Ratu is 1.42 times more volatile than Kalbe Farma Tbk. It trades about -0.19 of its total potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.2 per unit of volatility. If you would invest 160,500 in Kalbe Farma Tbk on August 31, 2024 and sell it today you would lose (11,000) from holding Kalbe Farma Tbk or give up 6.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Kalbe Farma Tbk |
Mustika Ratu and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Kalbe Farma
The main advantage of trading using opposite Mustika Ratu and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu 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.| Mustika Ratu vs. Pyridam Farma Tbk | Mustika Ratu vs. Mandom Indonesia Tbk | Mustika Ratu vs. Langgeng Makmur Industri | Mustika Ratu vs. Merck Tbk |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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