Correlation Between Unilever Indonesia and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Kalbe Farma 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 Unilever Indonesia and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Kalbe Farma Tbk, you can compare the effects of market volatilities on Unilever Indonesia and Kalbe Farma 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 Unilever Indonesia with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Kalbe Farma.
Diversification Opportunities for Unilever Indonesia and Kalbe Farma
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unilever and Kalbe is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and Unilever 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 Unilever Indonesia Tbk are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Kalbe Farma go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Kalbe Farma
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Kalbe Farma. In addition to that, Unilever Indonesia is 1.26 times more volatile than Kalbe Farma Tbk. It trades about -0.3 of its total potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.21 per unit of volatility. If you would invest 134,000 in Kalbe Farma Tbk on November 3, 2024 and sell it today you would lose (9,000) from holding Kalbe Farma Tbk or give up 6.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Kalbe Farma Tbk |
Unilever Indonesia and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Kalbe Farma
The main advantage of trading using opposite Unilever Indonesia and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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