Correlation Between PT Temas and Kabelindo Murni
Can any of the company-specific risk be diversified away by investing in both PT Temas and Kabelindo Murni 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 Temas and Kabelindo Murni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Temas Tbk and Kabelindo Murni Tbk, you can compare the effects of market volatilities on PT Temas and Kabelindo Murni 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 Temas with a short position of Kabelindo Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Temas and Kabelindo Murni.
Diversification Opportunities for PT Temas and Kabelindo Murni
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TMAS and Kabelindo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and Kabelindo Murni Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kabelindo Murni Tbk and PT Temas 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 Temas Tbk are associated (or correlated) with Kabelindo Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kabelindo Murni Tbk has no effect on the direction of PT Temas i.e., PT Temas and Kabelindo Murni go up and down completely randomly.
Pair Corralation between PT Temas and Kabelindo Murni
Assuming the 90 days trading horizon PT Temas Tbk is expected to under-perform the Kabelindo Murni. But the stock apears to be less risky and, when comparing its historical volatility, PT Temas Tbk is 1.65 times less risky than Kabelindo Murni. The stock trades about -0.04 of its potential returns per unit of risk. The Kabelindo Murni Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24,501 in Kabelindo Murni Tbk on August 29, 2024 and sell it today you would earn a total of 6,099 from holding Kabelindo Murni Tbk or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Temas Tbk vs. Kabelindo Murni Tbk
Performance |
| Timeline |
| PT Temas Tbk |
| Kabelindo Murni Tbk |
PT Temas and Kabelindo Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Temas and Kabelindo Murni
The main advantage of trading using opposite PT Temas and Kabelindo Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Temas position performs unexpectedly, Kabelindo Murni 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 Kabelindo Murni will offset losses from the drop in Kabelindo Murni's long position.| PT Temas vs. Samudera Indonesia Tbk | PT Temas vs. Weha Transportasi Indonesia | PT Temas vs. Rig Tenders Tbk | PT Temas vs. Total Bangun Persada |
| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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