Correlation Between Kioson Komersial and Armada Berjaya

Can any of the company-specific risk be diversified away by investing in both Kioson Komersial and Armada Berjaya 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 Armada Berjaya 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 Armada Berjaya Trans, you can compare the effects of market volatilities on Kioson Komersial and Armada Berjaya 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 Armada Berjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kioson Komersial and Armada Berjaya.

Diversification Opportunities for Kioson Komersial and Armada Berjaya

0.0

Correlation Coefficient

Kioson Komersial  Armada Berjaya

Pay attention - limited upside

The 3 months correlation between Kioson and Armada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kioson Komersial Indonesia and Armada Berjaya Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Berjaya Trans 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 Armada Berjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Berjaya Trans has no effect on the direction of Kioson Komersial i.e., Kioson Komersial and Armada Berjaya go up and down completely randomly.

Pair Corralation between Kioson Komersial and Armada Berjaya

If you would invest  5,000  in Kioson Komersial Indonesia on December 30, 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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kioson Komersial Indonesia  vs.  Armada Berjaya Trans

Kioson Komersial Ind

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kioson Komersial Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Armada Berjaya Trans

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Berjaya Trans has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Armada Berjaya 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 Armada Berjaya

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

The idea behind Kioson Komersial Indonesia and Armada Berjaya Trans 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.