Correlation Between Archi Indonesia and Cemindo Gemilang
Can any of the company-specific risk be diversified away by investing in both Archi Indonesia and Cemindo Gemilang 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 Archi Indonesia and Cemindo Gemilang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archi Indonesia Tbk and Cemindo Gemilang Tbk, you can compare the effects of market volatilities on Archi Indonesia and Cemindo Gemilang 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 Archi Indonesia with a short position of Cemindo Gemilang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archi Indonesia and Cemindo Gemilang.
Diversification Opportunities for Archi Indonesia and Cemindo Gemilang
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Archi and Cemindo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Archi Indonesia Tbk and Cemindo Gemilang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemindo Gemilang Tbk and Archi Indonesia 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 Archi Indonesia Tbk are associated (or correlated) with Cemindo Gemilang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemindo Gemilang Tbk has no effect on the direction of Archi Indonesia i.e., Archi Indonesia and Cemindo Gemilang go up and down completely randomly.
Pair Corralation between Archi Indonesia and Cemindo Gemilang
Assuming the 90 days trading horizon Archi Indonesia is expected to generate 24.51 times less return on investment than Cemindo Gemilang. But when comparing it to its historical volatility, Archi Indonesia Tbk is 1.14 times less risky than Cemindo Gemilang. It trades about 0.01 of its potential returns per unit of risk. Cemindo Gemilang Tbk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 91,000 in Cemindo Gemilang Tbk on September 12, 2024 and sell it today you would earn a total of 10,000 from holding Cemindo Gemilang Tbk or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archi Indonesia Tbk vs. Cemindo Gemilang Tbk
Performance |
| Timeline |
| Archi Indonesia Tbk |
| Cemindo Gemilang Tbk |
Archi Indonesia and Cemindo Gemilang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archi Indonesia and Cemindo Gemilang
The main advantage of trading using opposite Archi Indonesia and Cemindo Gemilang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archi Indonesia position performs unexpectedly, Cemindo Gemilang 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 Cemindo Gemilang will offset losses from the drop in Cemindo Gemilang's long position.| Archi Indonesia vs. Triputra Agro Persada | Archi Indonesia vs. Berkah Beton Sadaya | Archi Indonesia vs. PAM Mineral Tbk | Archi Indonesia vs. PT Bukalapak |
| Cemindo Gemilang vs. Berkah Beton Sadaya | Cemindo Gemilang vs. Archi Indonesia Tbk | Cemindo Gemilang vs. Avia Avian PT | Cemindo Gemilang vs. Capital Financial Indonesia |
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 Stocks Directory module to find actively traded stocks across global markets.
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