Correlation Between PT Indonesia and Kmi Wire
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Kmi Wire 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 PT Indonesia and Kmi Wire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indonesia Kendaraan and Kmi Wire And, you can compare the effects of market volatilities on PT Indonesia and Kmi Wire 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 PT Indonesia with a short position of Kmi Wire. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Kmi Wire.
Diversification Opportunities for PT Indonesia and Kmi Wire
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPCC and Kmi is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Kmi Wire And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmi Wire And and PT 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 PT Indonesia Kendaraan are associated (or correlated) with Kmi Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmi Wire And has no effect on the direction of PT Indonesia i.e., PT Indonesia and Kmi Wire go up and down completely randomly.
Pair Corralation between PT Indonesia and Kmi Wire
Assuming the 90 days trading horizon PT Indonesia Kendaraan is expected to generate 0.76 times more return on investment than Kmi Wire. However, PT Indonesia Kendaraan is 1.32 times less risky than Kmi Wire. It trades about 0.11 of its potential returns per unit of risk. Kmi Wire And is currently generating about -0.12 per unit of risk. If you would invest 65,709 in PT Indonesia Kendaraan on September 13, 2024 and sell it today you would earn a total of 6,291 from holding PT Indonesia Kendaraan or generate 9.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indonesia Kendaraan vs. Kmi Wire And
Performance |
Timeline |
PT Indonesia Kendaraan |
Kmi Wire And |
PT Indonesia and Kmi Wire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indonesia and Kmi Wire
The main advantage of trading using opposite PT Indonesia and Kmi Wire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, Kmi Wire 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 Kmi Wire will offset losses from the drop in Kmi Wire's long position.PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
Kmi Wire vs. PT Indonesia Kendaraan | Kmi Wire vs. Surya Toto Indonesia | Kmi Wire vs. Mitra Pinasthika Mustika | Kmi Wire vs. Integra Indocabinet 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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