Correlation Between Pacific Strategic and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Kalbe Farma 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 Pacific Strategic and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Strategic Financial and Kalbe Farma Tbk, you can compare the effects of market volatilities on Pacific Strategic and Kalbe Farma 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 Pacific Strategic with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Kalbe Farma.
Diversification Opportunities for Pacific Strategic and Kalbe Farma
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacific and Kalbe is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and Pacific Strategic 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 Pacific Strategic Financial are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Kalbe Farma go up and down completely randomly.
Pair Corralation between Pacific Strategic and Kalbe Farma
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to generate 0.66 times more return on investment than Kalbe Farma. However, Pacific Strategic Financial is 1.51 times less risky than Kalbe Farma. It trades about 0.0 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.02 per unit of risk. If you would invest 112,500 in Pacific Strategic Financial on January 27, 2024 and sell it today you would lose (1,500) from holding Pacific Strategic Financial or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Pacific Strategic |
| Kalbe Farma Tbk |
Pacific Strategic and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Kalbe Farma
The main advantage of trading using opposite Pacific Strategic and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Pacific Strategic vs. Astra International Tbk | Pacific Strategic vs. United Tractors Tbk | Pacific Strategic vs. Bukit Asam Tbk | Pacific Strategic vs. Indofood Sukses Makmur |
| Kalbe Farma vs. GoTo Gojek Tokopedia | Kalbe Farma vs. Bank Rakyat Indonesia | Kalbe Farma vs. Bank Central Asia | Kalbe Farma vs. Hanjaya Mandala Sampoerna |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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