Correlation Between Integra Indocabinet and Kmi Wire

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Kmi Wire 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 Integra Indocabinet and Kmi Wire into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Integra Indocabinet and Kmi Wire

-0.35

Correlation Coefficient

Integra Indocabinet  Kmi Wire

Very good diversification

The 3 months correlation between Integra and Kmi is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Kmi Wire And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmi Wire And and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Kmi Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmi Wire And has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Kmi Wire go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Kmi Wire

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 2.36 times more return on investment than Kmi Wire. However, Integra Indocabinet is 2.36 times more volatile than Kmi Wire And. It trades about 0.04 of its potential returns per unit of risk. Kmi Wire And is currently generating about 0.04 per unit of risk. If you would invest  30,800  in Integra Indocabinet Tbk on December 27, 2024 and sell it today you would earn a total of  1,200  from holding Integra Indocabinet Tbk or generate 3.9% return on investment over 90 days.

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

Integra Indocabinet Tbk  vs.  Kmi Wire And

Integra Indocabinet Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kmi Wire And

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kmi Wire And are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kmi Wire 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 Integra Indocabinet and Kmi Wire

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

The idea behind Integra Indocabinet Tbk and Kmi Wire And 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.