Correlation Between Mahkota Group and Kioson Komersial

Can any of the company-specific risk be diversified away by investing in both Mahkota Group 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 Mahkota Group and Kioson Komersial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mahkota Group Tbk and Kioson Komersial Indonesia, you can compare the effects of market volatilities on Mahkota Group 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 Mahkota Group with a short position of Kioson Komersial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahkota Group and Kioson Komersial.

Diversification Opportunities for Mahkota Group and Kioson Komersial

-0.23

Correlation Coefficient

Mahkota Group  Kioson Komersial

Very good diversification

The 3 months correlation between Mahkota and Kioson is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mahkota Group Tbk 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 Mahkota Group 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 Mahkota Group Tbk 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 Mahkota Group i.e., Mahkota Group and Kioson Komersial go up and down completely randomly.

Pair Corralation between Mahkota Group and Kioson Komersial

Assuming the 90 days trading horizon Mahkota Group Tbk is expected to generate 0.33 times more return on investment than Kioson Komersial. However, Mahkota Group Tbk is 3.08 times less risky than Kioson Komersial. It trades about 0.07 of its potential returns per unit of risk. Kioson Komersial Indonesia is currently generating about 0.02 per unit of risk. If you would invest  67,000  in Mahkota Group Tbk on September 15, 2024 and sell it today you would earn a total of  3,500  from holding Mahkota Group Tbk or generate 5.22% return on investment over 90 days.

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

Mahkota Group Tbk  vs.  Kioson Komersial Indonesia

Mahkota Group Tbk

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mahkota Group Tbk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Mahkota Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kioson Komersial Ind

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kioson Komersial Indonesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kioson Komersial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mahkota Group and Kioson Komersial

The main advantage of trading using opposite Mahkota Group and Kioson Komersial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahkota Group 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.

The idea behind Mahkota Group Tbk and Kioson Komersial Indonesia 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.