Correlation Between Uni Charm and Kencana Energi
Can any of the company-specific risk be diversified away by investing in both Uni Charm and Kencana Energi 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 Uni Charm and Kencana Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni Charm Indonesia and Kencana Energi Lestari, you can compare the effects of market volatilities on Uni Charm and Kencana Energi 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 Uni Charm with a short position of Kencana Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni Charm and Kencana Energi.
Diversification Opportunities for Uni Charm and Kencana Energi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Uni and Kencana is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Uni Charm Indonesia and Kencana Energi Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kencana Energi Lestari and Uni Charm 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 Uni Charm Indonesia are associated (or correlated) with Kencana Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kencana Energi Lestari has no effect on the direction of Uni Charm i.e., Uni Charm and Kencana Energi go up and down completely randomly.
Pair Corralation between Uni Charm and Kencana Energi
Assuming the 90 days trading horizon Uni Charm Indonesia is expected to under-perform the Kencana Energi. But the stock apears to be less risky and, when comparing its historical volatility, Uni Charm Indonesia is 1.62 times less risky than Kencana Energi. The stock trades about -0.05 of its potential returns per unit of risk. The Kencana Energi Lestari is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 68,635 in Kencana Energi Lestari on September 1, 2024 and sell it today you would lose (5,135) from holding Kencana Energi Lestari or give up 7.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Uni Charm Indonesia vs. Kencana Energi Lestari
Performance |
| Timeline |
| Uni Charm Indonesia |
| Kencana Energi Lestari |
Uni Charm and Kencana Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni Charm and Kencana Energi
The main advantage of trading using opposite Uni Charm and Kencana Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni Charm position performs unexpectedly, Kencana Energi 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 Kencana Energi will offset losses from the drop in Kencana Energi's long position.| Uni Charm vs. Kino Indonesia Tbk | Uni Charm vs. Garudafood Putra Putri | Uni Charm vs. Mulia Boga Raya | Uni Charm vs. Ultra Jaya Milk |
| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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