Correlation Between Kencana Energi and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Kencana Energi and NYSE Composite 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 Kencana Energi and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kencana Energi Lestari and NYSE Composite, you can compare the effects of market volatilities on Kencana Energi and NYSE Composite 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 Kencana Energi with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kencana Energi and NYSE Composite.
Diversification Opportunities for Kencana Energi and NYSE Composite
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kencana and NYSE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kencana Energi Lestari and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Kencana Energi 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 Kencana Energi Lestari are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Kencana Energi i.e., Kencana Energi and NYSE Composite go up and down completely randomly.
Pair Corralation between Kencana Energi and NYSE Composite
Assuming the 90 days trading horizon Kencana Energi Lestari is expected to under-perform the NYSE Composite. In addition to that, Kencana Energi is 2.15 times more volatile than NYSE Composite. It trades about -0.35 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.06 per unit of volatility. If you would invest 1,798,249 in NYSE Composite on February 4, 2024 and sell it today you would lose (18,460) from holding NYSE Composite or give up 1.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 69.57% |
Values | Daily Returns |
Kencana Energi Lestari vs. NYSE Composite
Performance |
Timeline |
Kencana Energi and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Kencana Energi Lestari
Pair trading matchups for Kencana Energi
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Kencana Energi and NYSE Composite
The main advantage of trading using opposite Kencana Energi and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kencana Energi position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
NYSE Composite vs. Gerdau SA ADR | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. KeyCorp | NYSE Composite vs. Chester Mining |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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