Correlation Between Kapuas Prima and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Kapuas Prima and Timah Persero 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 Timah Persero 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 Timah Persero Tbk, you can compare the effects of market volatilities on Kapuas Prima and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kapuas Prima and Timah Persero.
Diversification Opportunities for Kapuas Prima and Timah Persero
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kapuas and Timah is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kapuas Prima Coal and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Kapuas Prima i.e., Kapuas Prima and Timah Persero go up and down completely randomly.
Pair Corralation between Kapuas Prima and Timah Persero
Assuming the 90 days trading horizon Kapuas Prima Coal is expected to generate 0.86 times more return on investment than Timah Persero. However, Kapuas Prima Coal is 1.17 times less risky than Timah Persero. It trades about 0.02 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.24 per unit of risk. If you would invest 1,600 in Kapuas Prima Coal on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Kapuas Prima Coal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kapuas Prima Coal vs. Timah Persero Tbk
Performance |
| Timeline |
| Kapuas Prima Coal |
| Timah Persero Tbk |
Kapuas Prima and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kapuas Prima and Timah Persero
The main advantage of trading using opposite Kapuas Prima and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kapuas Prima position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Kapuas Prima vs. Timah Persero Tbk | Kapuas Prima vs. Semen Indonesia Persero | Kapuas Prima vs. Mitra Pinasthika Mustika | Kapuas Prima vs. Jakarta Int Hotels |
| Timah Persero vs. Semen Indonesia Persero | Timah Persero vs. Mitra Pinasthika Mustika | Timah Persero vs. Jakarta Int Hotels | Timah Persero vs. Asuransi Harta Aman |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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