Correlation Between Obm Drilchem and PT Kusuma
Can any of the company-specific risk be diversified away by investing in both Obm Drilchem and PT Kusuma 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 Obm Drilchem and PT Kusuma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obm Drilchem PT and PT Kusuma Kemindo, you can compare the effects of market volatilities on Obm Drilchem and PT Kusuma 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 Obm Drilchem with a short position of PT Kusuma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obm Drilchem and PT Kusuma.
Diversification Opportunities for Obm Drilchem and PT Kusuma
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Obm and KKES is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Obm Drilchem PT and PT Kusuma Kemindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kusuma Kemindo and Obm Drilchem 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 Obm Drilchem PT are associated (or correlated) with PT Kusuma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kusuma Kemindo has no effect on the direction of Obm Drilchem i.e., Obm Drilchem and PT Kusuma go up and down completely randomly.
Pair Corralation between Obm Drilchem and PT Kusuma
Assuming the 90 days trading horizon Obm Drilchem PT is expected to generate 1.67 times more return on investment than PT Kusuma. However, Obm Drilchem is 1.67 times more volatile than PT Kusuma Kemindo. It trades about -0.09 of its potential returns per unit of risk. PT Kusuma Kemindo is currently generating about -0.47 per unit of risk. If you would invest 21,600 in Obm Drilchem PT on September 2, 2024 and sell it today you would lose (1,200) from holding Obm Drilchem PT or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Obm Drilchem PT vs. PT Kusuma Kemindo
Performance |
| Timeline |
| Obm Drilchem PT |
| PT Kusuma Kemindo |
Obm Drilchem and PT Kusuma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obm Drilchem and PT Kusuma
The main advantage of trading using opposite Obm Drilchem and PT Kusuma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obm Drilchem position performs unexpectedly, PT Kusuma 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 PT Kusuma will offset losses from the drop in PT Kusuma's long position.| Obm Drilchem vs. RMK Energy PT | Obm Drilchem vs. PT Hasnur Internasional | Obm Drilchem vs. Surya Biru Murni | Obm Drilchem vs. PAM Mineral Tbk |
| PT Kusuma vs. PT Hetzer Medical | PT Kusuma vs. Bangun Karya Perkasa | PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Sari Kreasi |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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