Correlation Between Akasha Wira and FKS Food

Can any of the company-specific risk be diversified away by investing in both Akasha Wira and FKS Food 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 Akasha Wira and FKS Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akasha Wira International and FKS Food Sejahtera, you can compare the effects of market volatilities on Akasha Wira and FKS Food 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 Akasha Wira with a short position of FKS Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akasha Wira and FKS Food.

Diversification Opportunities for Akasha Wira and FKS Food

-0.26

Correlation Coefficient

Akasha Wira  FKS Food

Very good diversification

The 3 months correlation between Akasha and FKS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Akasha Wira International and FKS Food Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FKS Food Sejahtera and Akasha Wira 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 Akasha Wira International are associated (or correlated) with FKS Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FKS Food Sejahtera has no effect on the direction of Akasha Wira i.e., Akasha Wira and FKS Food go up and down completely randomly.

Pair Corralation between Akasha Wira and FKS Food

Assuming the 90 days trading horizon Akasha Wira International is expected to generate 0.81 times more return on investment than FKS Food. However, Akasha Wira International is 1.24 times less risky than FKS Food. It trades about 0.09 of its potential returns per unit of risk. FKS Food Sejahtera is currently generating about 0.03 per unit of risk. If you would invest  910,000  in Akasha Wira International on December 29, 2024 and sell it today you would earn a total of  80,000  from holding Akasha Wira International or generate 8.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Akasha Wira International  vs.  FKS Food Sejahtera

Akasha Wira International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akasha Wira International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Akasha Wira may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FKS Food Sejahtera

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FKS Food Sejahtera are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, FKS Food is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Akasha Wira and FKS Food

The main advantage of trading using opposite Akasha Wira and FKS Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akasha Wira position performs unexpectedly, FKS Food 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 FKS Food will offset losses from the drop in FKS Food's long position.

The idea behind Akasha Wira International and FKS Food Sejahtera pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.