Correlation Between Kioson Komersial and Hensel Davest

Can any of the company-specific risk be diversified away by investing in both Kioson Komersial and Hensel Davest 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 Kioson Komersial and Hensel Davest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kioson Komersial Indonesia and Hensel Davest Indonesia, you can compare the effects of market volatilities on Kioson Komersial and Hensel Davest 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 Kioson Komersial with a short position of Hensel Davest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kioson Komersial and Hensel Davest.

Diversification Opportunities for Kioson Komersial and Hensel Davest

0.09

Correlation Coefficient

Kioson Komersial  Hensel Davest

Significant diversification

The 3 months correlation between Kioson and Hensel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kioson Komersial Indonesia and Hensel Davest Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hensel Davest Indonesia and Kioson Komersial 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 Kioson Komersial Indonesia are associated (or correlated) with Hensel Davest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hensel Davest Indonesia has no effect on the direction of Kioson Komersial i.e., Kioson Komersial and Hensel Davest go up and down completely randomly.

Pair Corralation between Kioson Komersial and Hensel Davest

Assuming the 90 days trading horizon Kioson Komersial Indonesia is expected to generate 0.86 times more return on investment than Hensel Davest. However, Kioson Komersial Indonesia is 1.16 times less risky than Hensel Davest. It trades about 0.02 of its potential returns per unit of risk. Hensel Davest Indonesia is currently generating about -0.02 per unit of risk. If you would invest  5,000  in Kioson Komersial Indonesia on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Kioson Komersial Indonesia or generate 0.0% return on investment over 90 days.

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

Kioson Komersial Indonesia  vs.  Hensel Davest Indonesia

Kioson Komersial Ind

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kioson Komersial Indonesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kioson Komersial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Hensel Davest Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hensel Davest Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Hensel Davest 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 Kioson Komersial and Hensel Davest

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

The idea behind Kioson Komersial Indonesia and Hensel Davest Indonesia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.