Correlation Between Cahayaputra Asa and Planet Properindo
Can any of the company-specific risk be diversified away by investing in both Cahayaputra Asa and Planet Properindo 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 Cahayaputra Asa and Planet Properindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cahayaputra Asa Keramik and Planet Properindo Jaya, you can compare the effects of market volatilities on Cahayaputra Asa and Planet Properindo 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 Cahayaputra Asa with a short position of Planet Properindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cahayaputra Asa and Planet Properindo.
Diversification Opportunities for Cahayaputra Asa and Planet Properindo
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cahayaputra and Planet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and Planet Properindo Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Properindo Jaya and Cahayaputra Asa 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 Cahayaputra Asa Keramik are associated (or correlated) with Planet Properindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Properindo Jaya has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and Planet Properindo go up and down completely randomly.
Pair Corralation between Cahayaputra Asa and Planet Properindo
Assuming the 90 days trading horizon Cahayaputra Asa Keramik is expected to under-perform the Planet Properindo. But the stock apears to be less risky and, when comparing its historical volatility, Cahayaputra Asa Keramik is 3.29 times less risky than Planet Properindo. The stock trades about -0.1 of its potential returns per unit of risk. The Planet Properindo Jaya is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Planet Properindo Jaya on October 25, 2024 and sell it today you would earn a total of 400.00 from holding Planet Properindo Jaya or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cahayaputra Asa Keramik vs. Planet Properindo Jaya
Performance |
| Timeline |
| Cahayaputra Asa Keramik |
| Planet Properindo Jaya |
Cahayaputra Asa and Planet Properindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cahayaputra Asa and Planet Properindo
The main advantage of trading using opposite Cahayaputra Asa and Planet Properindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cahayaputra Asa position performs unexpectedly, Planet Properindo 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 Planet Properindo will offset losses from the drop in Planet Properindo's long position.| Cahayaputra Asa vs. Gunawan Dianjaya Steel | Cahayaputra Asa vs. Yelooo Integra Datanet | Cahayaputra Asa vs. Arita Prima Indonesia | Cahayaputra Asa vs. Bekasi Asri Pemula |
| Planet Properindo vs. PT Boston Furniture | Planet Properindo vs. Sejahtera Bintang Abadi | Planet Properindo vs. Menteng Heritage Realty | Planet Properindo vs. Lancartama Sejati 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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