Correlation Between PT Boston and Kedawung Setia
Can any of the company-specific risk be diversified away by investing in both PT Boston and Kedawung Setia 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 Boston and Kedawung Setia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Boston Furniture and Kedawung Setia Industrial, you can compare the effects of market volatilities on PT Boston and Kedawung Setia 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 Boston with a short position of Kedawung Setia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Boston and Kedawung Setia.
Diversification Opportunities for PT Boston and Kedawung Setia
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOFA and Kedawung is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Boston Furniture and Kedawung Setia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedawung Setia Industrial and PT Boston 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 Boston Furniture are associated (or correlated) with Kedawung Setia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedawung Setia Industrial has no effect on the direction of PT Boston i.e., PT Boston and Kedawung Setia go up and down completely randomly.
Pair Corralation between PT Boston and Kedawung Setia
Assuming the 90 days trading horizon PT Boston Furniture is expected to generate 1.39 times more return on investment than Kedawung Setia. However, PT Boston is 1.39 times more volatile than Kedawung Setia Industrial. It trades about 0.23 of its potential returns per unit of risk. Kedawung Setia Industrial is currently generating about 0.02 per unit of risk. If you would invest 1,400 in PT Boston Furniture on September 3, 2024 and sell it today you would earn a total of 2,300 from holding PT Boston Furniture or generate 164.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Boston Furniture vs. Kedawung Setia Industrial
Performance |
| Timeline |
| PT Boston Furniture |
| Kedawung Setia Industrial |
PT Boston and Kedawung Setia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Boston and Kedawung Setia
The main advantage of trading using opposite PT Boston and Kedawung Setia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Boston position performs unexpectedly, Kedawung Setia 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 Kedawung Setia will offset losses from the drop in Kedawung Setia's long position.| PT Boston vs. Mitra Pinasthika Mustika | PT Boston vs. Jakarta Int Hotels | PT Boston vs. Indosat Tbk | PT Boston vs. Inocycle Technology Tbk |
| Kedawung Setia vs. Timah Persero Tbk | Kedawung Setia vs. Semen Indonesia Persero | Kedawung Setia vs. Mitra Pinasthika Mustika | Kedawung Setia vs. Jakarta Int Hotels |
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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