Correlation Between Arita Prima and Kioson Komersial
Can any of the company-specific risk be diversified away by investing in both Arita Prima and Kioson Komersial 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 Arita Prima and Kioson Komersial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arita Prima Indonesia and Kioson Komersial Indonesia, you can compare the effects of market volatilities on Arita Prima and Kioson Komersial 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 Arita Prima with a short position of Kioson Komersial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arita Prima and Kioson Komersial.
Diversification Opportunities for Arita Prima and Kioson Komersial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arita and Kioson is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Arita Prima Indonesia and Kioson Komersial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kioson Komersial Ind and Arita Prima 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 Arita Prima Indonesia are associated (or correlated) with Kioson Komersial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kioson Komersial Ind has no effect on the direction of Arita Prima i.e., Arita Prima and Kioson Komersial go up and down completely randomly.
Pair Corralation between Arita Prima and Kioson Komersial
If you would invest 18,300 in Arita Prima Indonesia on February 6, 2024 and sell it today you would earn a total of 100.00 from holding Arita Prima Indonesia or generate 0.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Arita Prima Indonesia vs. Kioson Komersial Indonesia
Performance |
Timeline |
Arita Prima Indonesia |
Kioson Komersial Ind |
Arita Prima and Kioson Komersial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arita Prima and Kioson Komersial
The main advantage of trading using opposite Arita Prima and Kioson Komersial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arita Prima position performs unexpectedly, Kioson Komersial 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 Kioson Komersial will offset losses from the drop in Kioson Komersial's long position.Arita Prima vs. Bank Central Asia | Arita Prima vs. Bank Rakyat Indonesia | Arita Prima vs. Bayan Resources Tbk | Arita Prima vs. Bank Mandiri Persero |
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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.
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