Correlation Between Roche Holding and PT Kalbe
Can any of the company-specific risk be diversified away by investing in both Roche Holding and PT Kalbe 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 Roche Holding and PT Kalbe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roche Holding Ltd and PT Kalbe Farma, you can compare the effects of market volatilities on Roche Holding and PT Kalbe 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 Roche Holding with a short position of PT Kalbe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roche Holding and PT Kalbe.
Diversification Opportunities for Roche Holding and PT Kalbe
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roche and PTKFF is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Roche Holding Ltd and PT Kalbe Farma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kalbe Farma and Roche Holding 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 Roche Holding Ltd are associated (or correlated) with PT Kalbe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kalbe Farma has no effect on the direction of Roche Holding i.e., Roche Holding and PT Kalbe go up and down completely randomly.
Pair Corralation between Roche Holding and PT Kalbe
Assuming the 90 days horizon Roche Holding Ltd is expected to under-perform the PT Kalbe. But the otc stock apears to be less risky and, when comparing its historical volatility, Roche Holding Ltd is 2.86 times less risky than PT Kalbe. The otc stock trades about -0.61 of its potential returns per unit of risk. The PT Kalbe Farma is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 11.00 in PT Kalbe Farma on August 25, 2024 and sell it today you would lose (1.49) from holding PT Kalbe Farma or give up 13.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roche Holding Ltd vs. PT Kalbe Farma
Performance |
| Timeline |
| Roche Holding |
| PT Kalbe Farma |
Roche Holding and PT Kalbe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roche Holding and PT Kalbe
The main advantage of trading using opposite Roche Holding and PT Kalbe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roche Holding position performs unexpectedly, PT Kalbe 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 Kalbe will offset losses from the drop in PT Kalbe's long position.| Roche Holding vs. Sanofi ADR | Roche Holding vs. AstraZeneca PLC ADR | Roche Holding vs. GlaxoSmithKline PLC ADR | Roche Holding vs. Merck Company |
| PT Kalbe vs. Sanofi ADR | PT Kalbe vs. Bristol Myers Squibb | PT Kalbe vs. AstraZeneca PLC ADR | PT Kalbe vs. Gilead Sciences |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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