Correlation Between Kmi Wire and Samindo Resources
Can any of the company-specific risk be diversified away by investing in both Kmi Wire and Samindo Resources 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 Samindo Resources 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 Samindo Resources Tbk, you can compare the effects of market volatilities on Kmi Wire and Samindo Resources 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 Samindo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmi Wire and Samindo Resources.
Diversification Opportunities for Kmi Wire and Samindo Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kmi and Samindo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kmi Wire And and Samindo Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samindo Resources Tbk 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 Samindo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samindo Resources Tbk has no effect on the direction of Kmi Wire i.e., Kmi Wire and Samindo Resources go up and down completely randomly.
Pair Corralation between Kmi Wire and Samindo Resources
Assuming the 90 days trading horizon Kmi Wire is expected to generate 9.45 times less return on investment than Samindo Resources. But when comparing it to its historical volatility, Kmi Wire And is 1.74 times less risky than Samindo Resources. It trades about 0.02 of its potential returns per unit of risk. Samindo Resources Tbk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 160,000 in Samindo Resources Tbk on December 4, 2024 and sell it today you would earn a total of 25,000 from holding Samindo Resources Tbk or generate 15.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kmi Wire And vs. Samindo Resources Tbk
Performance |
Timeline |
Kmi Wire And |
Samindo Resources Tbk |
Kmi Wire and Samindo Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kmi Wire and Samindo Resources
The main advantage of trading using opposite Kmi Wire and Samindo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmi Wire position performs unexpectedly, Samindo Resources 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 Samindo Resources will offset losses from the drop in Samindo Resources' long position.Kmi Wire vs. Kabelindo Murni Tbk | Kmi Wire vs. Jembo Cable | Kmi Wire vs. Gajah Tunggal Tbk | Kmi Wire vs. Indospring Tbk |
Samindo Resources vs. Resource Alam Indonesia | Samindo Resources vs. Petrosea Tbk | Samindo Resources vs. Kmi Wire And | Samindo Resources vs. Mitrabara Adiperdana PT |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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