Identification of Prospective Subindustries Ahead of the 2024 Simultaneous General Elections with K-Medoids Clustering

Identifikasi Subindustri Prospektif Menjelang Pemilihan Umum Serentak 2024 dengan K-Medoids Clustering

Abstract

Indonesia Stock Exchange (IDX) Composite has grown in each general election year since 1998. This indicates that certain subindustries have benefited positively from the election year momentum. However, analyzing each subindustry was less efficient. This study aimed to identify prospective subindustries leading up to the 2024 Simultaneous Election based on the results of K-Medoids clustering on data from the lead-up to the 2019 Simultaneous Election. Research variables covered long-term price rate of change (indicating trends) and volatility (depicting fluctuations). These were derived from transforming historical stock price data for each issuer on a weekly basis in the two years before the 2019 Simultaneous Election. Four clusters emerged: high positive, low positive, high negative, and low negative. Positivity/negativity signify trends and high/low represent fluctuations. High fluctuations indicate higher risks. Prospective subindustries for the 2024 Simultaneous Election with low risk include household furniture manufacturers, basic chemical producers, construction materials, packaging, tires, household goods retail, life insurance, consumer finance, and financial holding companies. On the other hand, sub-industries with high risks for the 2024 Simultaneous Election include aluminum, paper, and textiles.