Correlation Between Kokoh Inti and Central Proteina
Can any of the company-specific risk be diversified away by investing in both Kokoh Inti and Central Proteina 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 Kokoh Inti and Central Proteina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kokoh Inti Arebama and Central Proteina Prima, you can compare the effects of market volatilities on Kokoh Inti and Central Proteina 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 Kokoh Inti with a short position of Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kokoh Inti and Central Proteina.
Diversification Opportunities for Kokoh Inti and Central Proteina
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kokoh and Central is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kokoh Inti Arebama and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima and Kokoh Inti 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 Kokoh Inti Arebama are associated (or correlated) with Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Kokoh Inti i.e., Kokoh Inti and Central Proteina go up and down completely randomly.
Pair Corralation between Kokoh Inti and Central Proteina
Assuming the 90 days trading horizon Kokoh Inti Arebama is expected to under-perform the Central Proteina. In addition to that, Kokoh Inti is 1.29 times more volatile than Central Proteina Prima. It trades about -0.04 of its total potential returns per unit of risk. Central Proteina Prima is currently generating about -0.01 per unit of volatility. If you would invest 6,000 in Central Proteina Prima on January 19, 2024 and sell it today you would lose (1,000.00) from holding Central Proteina Prima or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Kokoh Inti Arebama vs. Central Proteina Prima
Performance |
| Timeline |
| Kokoh Inti Arebama |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Central Proteina Prima |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kokoh Inti and Central Proteina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kokoh Inti and Central Proteina
The main advantage of trading using opposite Kokoh Inti and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kokoh Inti position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina's long position.The idea behind Kokoh Inti Arebama and Central Proteina Prima 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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