Correlation Between Kioson Komersial and Guna Timur

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

Diversification Opportunities for Kioson Komersial and Guna Timur

0.0

Correlation Coefficient

Kioson Komersial  Guna Timur

Pay attention - limited upside

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

Pair Corralation between Kioson Komersial and Guna Timur

If you would invest  7,700  in Guna Timur Raya on December 2, 2024 and sell it today you would earn a total of  3,100  from holding Guna Timur Raya or generate 40.26% 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.  Guna Timur Raya

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.

Guna Timur Raya

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guna Timur Raya are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Guna Timur disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kioson Komersial and Guna Timur

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

The idea behind Kioson Komersial Indonesia and Guna Timur Raya 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.