Correlation Between PT Cilacap and PT Arkora
Can any of the company-specific risk be diversified away by investing in both PT Cilacap and PT Arkora 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 Cilacap and PT Arkora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Cilacap Samudera and PT Arkora Hydro, you can compare the effects of market volatilities on PT Cilacap and PT Arkora 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 Cilacap with a short position of PT Arkora. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Cilacap and PT Arkora.
Diversification Opportunities for PT Cilacap and PT Arkora
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASHA and ARKO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PT Cilacap Samudera and PT Arkora Hydro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Arkora Hydro and PT Cilacap 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 Cilacap Samudera are associated (or correlated) with PT Arkora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Arkora Hydro has no effect on the direction of PT Cilacap i.e., PT Cilacap and PT Arkora go up and down completely randomly.
Pair Corralation between PT Cilacap and PT Arkora
Assuming the 90 days trading horizon PT Cilacap Samudera is expected to under-perform the PT Arkora. In addition to that, PT Cilacap is 1.74 times more volatile than PT Arkora Hydro. It trades about -0.11 of its total potential returns per unit of risk. PT Arkora Hydro is currently generating about -0.1 per unit of volatility. If you would invest 105,000 in PT Arkora Hydro on September 2, 2024 and sell it today you would lose (8,000) from holding PT Arkora Hydro or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Cilacap Samudera vs. PT Arkora Hydro
Performance |
| Timeline |
| PT Cilacap Samudera |
| PT Arkora Hydro |
PT Cilacap and PT Arkora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Cilacap and PT Arkora
The main advantage of trading using opposite PT Cilacap and PT Arkora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Cilacap position performs unexpectedly, PT Arkora 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 Arkora will offset losses from the drop in PT Arkora's long position.| PT Cilacap vs. PT Dewi Shri | PT Cilacap vs. PT Data Sinergitama | PT Cilacap vs. PAM Mineral Tbk | PT Cilacap vs. Autopedia Sukses Lestari |
| PT Arkora vs. PT Dewi Shri | PT Arkora vs. Adaro Minerals Indonesia | PT Arkora vs. PT Cilacap Samudera | PT Arkora vs. Habco Trans Maritima |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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