Correlation Between PT Arkora and PT Cilacap
Can any of the company-specific risk be diversified away by investing in both PT Arkora and PT Cilacap 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 PT Arkora and PT Cilacap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Arkora Hydro and PT Cilacap Samudera, you can compare the effects of market volatilities on PT Arkora and PT Cilacap 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 PT Arkora with a short position of PT Cilacap. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Arkora and PT Cilacap.
Diversification Opportunities for PT Arkora and PT Cilacap
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARKO and ASHA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PT Arkora Hydro and PT Cilacap Samudera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Cilacap Samudera and PT Arkora 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 PT Arkora Hydro are associated (or correlated) with PT Cilacap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Cilacap Samudera has no effect on the direction of PT Arkora i.e., PT Arkora and PT Cilacap go up and down completely randomly.
Pair Corralation between PT Arkora and PT Cilacap
Assuming the 90 days trading horizon PT Arkora Hydro is expected to generate 0.7 times more return on investment than PT Cilacap. However, PT Arkora Hydro is 1.43 times less risky than PT Cilacap. It trades about 0.05 of its potential returns per unit of risk. PT Cilacap Samudera is currently generating about -0.08 per unit of risk. If you would invest 56,500 in PT Arkora Hydro on November 28, 2024 and sell it today you would earn a total of 37,500 from holding PT Arkora Hydro or generate 66.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Arkora Hydro vs. PT Cilacap Samudera
Performance |
| Timeline |
| PT Arkora Hydro |
| PT Cilacap Samudera |
PT Arkora and PT Cilacap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Arkora and PT Cilacap
The main advantage of trading using opposite PT Arkora and PT Cilacap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Arkora position performs unexpectedly, PT Cilacap 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 Cilacap will offset losses from the drop in PT Cilacap's long position.| PT Arkora vs. PT Dewi Shri | PT Arkora vs. Adaro Minerals Indonesia | PT Arkora vs. PT Cilacap Samudera | PT Arkora vs. Habco Trans Maritima |
| PT Cilacap vs. PT Dewi Shri | PT Cilacap vs. Adaro Minerals Indonesia | PT Cilacap vs. Autopedia Sukses Lestari | PT Cilacap vs. Wir Asia Tbk |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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