Correlation Between Akasha Wira and Metropolitan Kentjana
Can any of the company-specific risk be diversified away by investing in both Akasha Wira and Metropolitan Kentjana 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 Akasha Wira and Metropolitan Kentjana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akasha Wira International and Metropolitan Kentjana Tbk, you can compare the effects of market volatilities on Akasha Wira and Metropolitan Kentjana 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 Akasha Wira with a short position of Metropolitan Kentjana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akasha Wira and Metropolitan Kentjana.
Diversification Opportunities for Akasha Wira and Metropolitan Kentjana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akasha and Metropolitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Akasha Wira International and Metropolitan Kentjana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Kentjana Tbk and Akasha Wira 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 Akasha Wira International are associated (or correlated) with Metropolitan Kentjana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Kentjana Tbk has no effect on the direction of Akasha Wira i.e., Akasha Wira and Metropolitan Kentjana go up and down completely randomly.
Pair Corralation between Akasha Wira and Metropolitan Kentjana
Assuming the 90 days trading horizon Akasha Wira International is expected to under-perform the Metropolitan Kentjana. In addition to that, Akasha Wira is 2.61 times more volatile than Metropolitan Kentjana Tbk. It trades about -0.15 of its total potential returns per unit of risk. Metropolitan Kentjana Tbk is currently generating about 0.32 per unit of volatility. If you would invest 2,695,000 in Metropolitan Kentjana Tbk on January 20, 2024 and sell it today you would earn a total of 100,000 from holding Metropolitan Kentjana Tbk or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akasha Wira International vs. Metropolitan Kentjana Tbk
Performance |
| Timeline |
| Akasha Wira International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metropolitan Kentjana Tbk |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Akasha Wira and Metropolitan Kentjana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akasha Wira and Metropolitan Kentjana
The main advantage of trading using opposite Akasha Wira and Metropolitan Kentjana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akasha Wira position performs unexpectedly, Metropolitan Kentjana 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 Metropolitan Kentjana will offset losses from the drop in Metropolitan Kentjana's long position.The idea behind Akasha Wira International and Metropolitan Kentjana Tbk 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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