Correlation Between PT Kalbe and Centrica PLC
Can any of the company-specific risk be diversified away by investing in both PT Kalbe and Centrica PLC 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 PT Kalbe and Centrica PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Kalbe Farma and Centrica PLC ADR, you can compare the effects of market volatilities on PT Kalbe and Centrica PLC 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 PT Kalbe with a short position of Centrica PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Kalbe and Centrica PLC.
Diversification Opportunities for PT Kalbe and Centrica PLC
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PTKFF and Centrica is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Kalbe Farma and Centrica PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrica PLC ADR and PT Kalbe 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 PT Kalbe Farma are associated (or correlated) with Centrica PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrica PLC ADR has no effect on the direction of PT Kalbe i.e., PT Kalbe and Centrica PLC go up and down completely randomly.
Pair Corralation between PT Kalbe and Centrica PLC
Assuming the 90 days horizon PT Kalbe Farma is expected to under-perform the Centrica PLC. In addition to that, PT Kalbe is 1.57 times more volatile than Centrica PLC ADR. It trades about -0.22 of its total potential returns per unit of risk. Centrica PLC ADR is currently generating about 0.24 per unit of volatility. If you would invest 595.00 in Centrica PLC ADR on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Centrica PLC ADR or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Kalbe Farma vs. Centrica PLC ADR
Performance |
| Timeline |
| PT Kalbe Farma |
| Centrica PLC ADR |
PT Kalbe and Centrica PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Kalbe and Centrica PLC
The main advantage of trading using opposite PT Kalbe and Centrica PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Kalbe position performs unexpectedly, Centrica PLC 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 Centrica PLC will offset losses from the drop in Centrica PLC's long position.| PT Kalbe vs. Amgen Inc | PT Kalbe vs. Bristol Myers Squibb | PT Kalbe vs. Roche Holding AG | PT Kalbe vs. Novartis AG |
| Centrica PLC vs. NRG Energy | Centrica PLC vs. TransAlta Corp | Centrica PLC vs. Kenon Holdings | Centrica PLC vs. Pampa Energia SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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