Correlation Between Kabelindo Murni and Berlina Tbk

Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Berlina Tbk 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 Kabelindo Murni and Berlina Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kabelindo Murni Tbk and Berlina Tbk, you can compare the effects of market volatilities on Kabelindo Murni and Berlina Tbk 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 Kabelindo Murni with a short position of Berlina Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Berlina Tbk.

Diversification Opportunities for Kabelindo Murni and Berlina Tbk

-0.01

Correlation Coefficient

Kabelindo Murni  Berlina Tbk

Good diversification

The 3 months correlation between Kabelindo and Berlina is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Berlina Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berlina Tbk and Kabelindo Murni 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 Kabelindo Murni Tbk are associated (or correlated) with Berlina Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berlina Tbk has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Berlina Tbk go up and down completely randomly.

Pair Corralation between Kabelindo Murni and Berlina Tbk

Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to under-perform the Berlina Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Kabelindo Murni Tbk is 1.45 times less risky than Berlina Tbk. The stock trades about -0.06 of its potential returns per unit of risk. The Berlina Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  70,000  in Berlina Tbk on December 23, 2024 and sell it today you would earn a total of  0.00  from holding Berlina Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Kabelindo Murni Tbk  vs.  Berlina Tbk

Kabelindo Murni Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kabelindo Murni Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Berlina Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Berlina Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Berlina Tbk 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 Kabelindo Murni and Berlina Tbk

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

The idea behind Kabelindo Murni Tbk and Berlina Tbk 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.