Correlation Between Semen Indonesia and Kapuas Prima
Can any of the company-specific risk be diversified away by investing in both Semen Indonesia and Kapuas Prima 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 Indonesia and Kapuas Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semen Indonesia Persero and Kapuas Prima Coal, you can compare the effects of market volatilities on Semen Indonesia and Kapuas Prima 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 Indonesia with a short position of Kapuas Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Indonesia and Kapuas Prima.
Diversification Opportunities for Semen Indonesia and Kapuas Prima
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semen and Kapuas is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Semen Indonesia Persero and Kapuas Prima Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kapuas Prima Coal and Semen Indonesia 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 Indonesia Persero are associated (or correlated) with Kapuas Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kapuas Prima Coal has no effect on the direction of Semen Indonesia i.e., Semen Indonesia and Kapuas Prima go up and down completely randomly.
Pair Corralation between Semen Indonesia and Kapuas Prima
Assuming the 90 days trading horizon Semen Indonesia Persero is expected to generate 0.58 times more return on investment than Kapuas Prima. However, Semen Indonesia Persero is 1.72 times less risky than Kapuas Prima. It trades about -0.05 of its potential returns per unit of risk. Kapuas Prima Coal is currently generating about -0.05 per unit of risk. If you would invest 633,409 in Semen Indonesia Persero on September 13, 2024 and sell it today you would lose (289,409) from holding Semen Indonesia Persero or give up 45.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semen Indonesia Persero vs. Kapuas Prima Coal
Performance |
| Timeline |
| Semen Indonesia Persero |
| Kapuas Prima Coal |
Semen Indonesia and Kapuas Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Indonesia and Kapuas Prima
The main advantage of trading using opposite Semen Indonesia and Kapuas Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Indonesia position performs unexpectedly, Kapuas Prima 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 Kapuas Prima will offset losses from the drop in Kapuas Prima's long position.| Semen Indonesia vs. Kedaung Indah Can | Semen Indonesia vs. Kabelindo Murni Tbk | Semen Indonesia vs. Champion Pacific Indonesia | Semen Indonesia vs. Bhuwanatala Indah Permai |
| Kapuas Prima vs. Merdeka Copper Gold | Kapuas Prima vs. J Resources Asia | Kapuas Prima vs. Central Omega Resources | Kapuas Prima vs. Puradelta Lestari PT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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