Correlation Between Chandra Asri and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Capital Financial 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 Chandra Asri and Capital Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chandra Asri Petrochemical and Capital Financial Indonesia, you can compare the effects of market volatilities on Chandra Asri and Capital Financial 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 Chandra Asri with a short position of Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Capital Financial.
Diversification Opportunities for Chandra Asri and Capital Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chandra and Capital is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial and Chandra Asri 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 Chandra Asri Petrochemical are associated (or correlated) with Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Chandra Asri i.e., Chandra Asri and Capital Financial go up and down completely randomly.
Pair Corralation between Chandra Asri and Capital Financial
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Capital Financial. In addition to that, Chandra Asri is 1.37 times more volatile than Capital Financial Indonesia. It trades about -0.12 of its total potential returns per unit of risk. Capital Financial Indonesia is currently generating about 0.02 per unit of volatility. If you would invest 50,000 in Capital Financial Indonesia on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Capital Financial Indonesia or generate 2.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chandra Asri Petrochemical vs. Capital Financial Indonesia
Performance |
Timeline |
Chandra Asri Petroch |
Capital Financial |
Chandra Asri and Capital Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chandra Asri and Capital Financial
The main advantage of trading using opposite Chandra Asri and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial's long position.Chandra Asri vs. Timah Persero Tbk | Chandra Asri vs. Semen Indonesia Persero | Chandra Asri vs. Mitra Pinasthika Mustika | Chandra Asri vs. Jakarta Int Hotels |
Capital Financial vs. Paninvest Tbk | Capital Financial vs. Mitra Pinasthika Mustika | Capital Financial vs. Jakarta Int Hotels | Capital Financial vs. Asuransi Harta Aman |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Commodity Directory Find actively traded commodities issued by global exchanges |