Correlation Between Kapuas Prima and Borneo Olah
Can any of the company-specific risk be diversified away by investing in both Kapuas Prima and Borneo Olah 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 Kapuas Prima and Borneo Olah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kapuas Prima Coal and Borneo Olah Sarana, you can compare the effects of market volatilities on Kapuas Prima and Borneo Olah 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 Kapuas Prima with a short position of Borneo Olah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kapuas Prima and Borneo Olah.
Diversification Opportunities for Kapuas Prima and Borneo Olah
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kapuas and Borneo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kapuas Prima Coal and Borneo Olah Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borneo Olah Sarana and Kapuas Prima 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 Kapuas Prima Coal are associated (or correlated) with Borneo Olah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borneo Olah Sarana has no effect on the direction of Kapuas Prima i.e., Kapuas Prima and Borneo Olah go up and down completely randomly.
Pair Corralation between Kapuas Prima and Borneo Olah
If you would invest 5,000 in Borneo Olah Sarana on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Borneo Olah Sarana or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kapuas Prima Coal vs. Borneo Olah Sarana
Performance |
| Timeline |
| Kapuas Prima Coal |
| Borneo Olah Sarana |
Kapuas Prima and Borneo Olah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kapuas Prima and Borneo Olah
The main advantage of trading using opposite Kapuas Prima and Borneo Olah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kapuas Prima position performs unexpectedly, Borneo Olah 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 Borneo Olah will offset losses from the drop in Borneo Olah's long position.| Kapuas Prima vs. Perusahaan Gas Negara | Kapuas Prima vs. Vale Indonesia Tbk | Kapuas Prima vs. Telkom Indonesia Tbk | Kapuas Prima vs. Mitra Pinasthika Mustika |
| Borneo Olah vs. Alfa Energi Investama | Borneo Olah vs. Atlas Resources Tbk | Borneo Olah vs. Baramulti Suksessarana Tbk | Borneo Olah vs. Kapuas Prima Coal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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