Correlation Between Cemindo Gemilang and PT Hasnur

Can any of the company-specific risk be diversified away by investing in both Cemindo Gemilang and PT Hasnur 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 Cemindo Gemilang and PT Hasnur into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cemindo Gemilang Tbk and PT Hasnur Internasional, you can compare the effects of market volatilities on Cemindo Gemilang and PT Hasnur 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 Cemindo Gemilang with a short position of PT Hasnur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemindo Gemilang and PT Hasnur.

Diversification Opportunities for Cemindo Gemilang and PT Hasnur

-0.43

Correlation Coefficient

Cemindo Gemilang  PT Hasnur

Very good diversification

The 3 months correlation between Cemindo and HAIS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cemindo Gemilang Tbk and PT Hasnur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hasnur Internasional and Cemindo Gemilang 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 Cemindo Gemilang Tbk are associated (or correlated) with PT Hasnur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hasnur Internasional has no effect on the direction of Cemindo Gemilang i.e., Cemindo Gemilang and PT Hasnur go up and down completely randomly.

Pair Corralation between Cemindo Gemilang and PT Hasnur

Assuming the 90 days trading horizon Cemindo Gemilang Tbk is expected to under-perform the PT Hasnur. In addition to that, Cemindo Gemilang is 1.18 times more volatile than PT Hasnur Internasional. It trades about -0.03 of its total potential returns per unit of risk. PT Hasnur Internasional is currently generating about 0.01 per unit of volatility. If you would invest  21,600  in PT Hasnur Internasional on September 16, 2024 and sell it today you would earn a total of  0.00  from holding PT Hasnur Internasional or generate 0.0% return on investment over 90 days.

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

Cemindo Gemilang Tbk  vs.  PT Hasnur Internasional

Cemindo Gemilang Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemindo Gemilang Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Cemindo Gemilang is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT Hasnur Internasional

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hasnur Internasional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Hasnur 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 Cemindo Gemilang and PT Hasnur

The main advantage of trading using opposite Cemindo Gemilang and PT Hasnur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemindo Gemilang position performs unexpectedly, PT Hasnur 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 PT Hasnur will offset losses from the drop in PT Hasnur's long position.

The idea behind Cemindo Gemilang Tbk and PT Hasnur Internasional 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.