Correlation Between Semen Baturaja and Kedaung Indah
Can any of the company-specific risk be diversified away by investing in both Semen Baturaja and Kedaung Indah 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 Semen Baturaja and Kedaung Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semen Baturaja Persero and Kedaung Indah Can, you can compare the effects of market volatilities on Semen Baturaja and Kedaung Indah 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 Semen Baturaja with a short position of Kedaung Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Baturaja and Kedaung Indah.
Diversification Opportunities for Semen Baturaja and Kedaung Indah
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Semen and Kedaung is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Semen Baturaja Persero and Kedaung Indah Can in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedaung Indah Can and Semen Baturaja 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 Semen Baturaja Persero are associated (or correlated) with Kedaung Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedaung Indah Can has no effect on the direction of Semen Baturaja i.e., Semen Baturaja and Kedaung Indah go up and down completely randomly.
Pair Corralation between Semen Baturaja and Kedaung Indah
Assuming the 90 days trading horizon Semen Baturaja Persero is expected to under-perform the Kedaung Indah. But the stock apears to be less risky and, when comparing its historical volatility, Semen Baturaja Persero is 2.42 times less risky than Kedaung Indah. The stock trades about -0.04 of its potential returns per unit of risk. The Kedaung Indah Can is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17,000 in Kedaung Indah Can on August 30, 2024 and sell it today you would lose (3,700) from holding Kedaung Indah Can or give up 21.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Semen Baturaja Persero vs. Kedaung Indah Can
Performance |
| Timeline |
| Semen Baturaja Persero |
| Kedaung Indah Can |
Semen Baturaja and Kedaung Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Baturaja and Kedaung Indah
The main advantage of trading using opposite Semen Baturaja and Kedaung Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Baturaja position performs unexpectedly, Kedaung Indah 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 Kedaung Indah will offset losses from the drop in Kedaung Indah's long position.| Semen Baturaja vs. Barito Pacific Tbk | Semen Baturaja vs. Charoen Pokphand Indonesia | Semen Baturaja vs. Indocement Tunggal Prakarsa |
| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |