Correlation Between PT Homeco and Kokoh Inti

Can any of the company-specific risk be diversified away by investing in both PT Homeco and Kokoh Inti 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 PT Homeco and Kokoh Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Homeco Victoria and Kokoh Inti Arebama, you can compare the effects of market volatilities on PT Homeco and Kokoh Inti 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 PT Homeco with a short position of Kokoh Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Homeco and Kokoh Inti.

Diversification Opportunities for PT Homeco and Kokoh Inti

0.06

Correlation Coefficient

PT Homeco  Kokoh Inti

Significant diversification

The 3 months correlation between LIVE and Kokoh is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Homeco Victoria and Kokoh Inti Arebama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kokoh Inti Arebama and PT Homeco 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 PT Homeco Victoria are associated (or correlated) with Kokoh Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kokoh Inti Arebama has no effect on the direction of PT Homeco i.e., PT Homeco and Kokoh Inti go up and down completely randomly.

Pair Corralation between PT Homeco and Kokoh Inti

If you would invest  17,700  in PT Homeco Victoria on January 29, 2024 and sell it today you would earn a total of  400.00  from holding PT Homeco Victoria or generate 2.26% return on investment over 90 days.

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

PT Homeco Victoria  vs.  Kokoh Inti Arebama

PT Homeco Victoria

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Homeco Victoria are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, PT Homeco may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Kokoh Inti Arebama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kokoh Inti Arebama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT Homeco and Kokoh Inti

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

The idea behind PT Homeco Victoria and Kokoh Inti Arebama 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.