Correlation Between Kmi Wire and Resource Alam
Can any of the company-specific risk be diversified away by investing in both Kmi Wire and Resource Alam 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 Kmi Wire and Resource Alam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kmi Wire And and Resource Alam Indonesia, you can compare the effects of market volatilities on Kmi Wire and Resource Alam 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 Kmi Wire with a short position of Resource Alam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmi Wire and Resource Alam.
Diversification Opportunities for Kmi Wire and Resource Alam
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kmi and Resource is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kmi Wire And and Resource Alam Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Alam Indonesia and Kmi Wire 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 Kmi Wire And are associated (or correlated) with Resource Alam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Alam Indonesia has no effect on the direction of Kmi Wire i.e., Kmi Wire and Resource Alam go up and down completely randomly.
Pair Corralation between Kmi Wire and Resource Alam
Assuming the 90 days trading horizon Kmi Wire And is expected to generate 0.69 times more return on investment than Resource Alam. However, Kmi Wire And is 1.45 times less risky than Resource Alam. It trades about -0.03 of its potential returns per unit of risk. Resource Alam Indonesia is currently generating about -0.18 per unit of risk. If you would invest 37,600 in Kmi Wire And on December 2, 2024 and sell it today you would lose (1,200) from holding Kmi Wire And or give up 3.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kmi Wire And vs. Resource Alam Indonesia
Performance |
Timeline |
Kmi Wire And |
Resource Alam Indonesia |
Kmi Wire and Resource Alam Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kmi Wire and Resource Alam
The main advantage of trading using opposite Kmi Wire and Resource Alam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmi Wire position performs unexpectedly, Resource Alam 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 Resource Alam will offset losses from the drop in Resource Alam's long position.Kmi Wire vs. Kabelindo Murni Tbk | Kmi Wire vs. Jembo Cable | Kmi Wire vs. Gajah Tunggal Tbk | Kmi Wire vs. Indospring Tbk |
Resource Alam vs. Petrosea Tbk | Resource Alam vs. Harum Energy Tbk | Resource Alam vs. Perdana Karya Perkasa | Resource Alam vs. Bayan Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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