Correlation Between Capital Financial and Cemindo Gemilang
Can any of the company-specific risk be diversified away by investing in both Capital Financial 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 Capital Financial and Cemindo Gemilang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Financial Indonesia and Cemindo Gemilang Tbk, you can compare the effects of market volatilities on Capital Financial 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 Capital Financial with a short position of Cemindo Gemilang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Cemindo Gemilang.
Diversification Opportunities for Capital Financial and Cemindo Gemilang
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Cemindo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia 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 Capital Financial 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 Capital Financial Indonesia 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 Capital Financial i.e., Capital Financial and Cemindo Gemilang go up and down completely randomly.
Pair Corralation between Capital Financial and Cemindo Gemilang
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to under-perform the Cemindo Gemilang. But the stock apears to be less risky and, when comparing its historical volatility, Capital Financial Indonesia is 1.6 times less risky than Cemindo Gemilang. The stock trades about -0.23 of its potential returns per unit of risk. The 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Cemindo Gemilang Tbk
Performance |
| Timeline |
| Capital Financial |
| Cemindo Gemilang Tbk |
Capital Financial and Cemindo Gemilang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Cemindo Gemilang
The main advantage of trading using opposite Capital Financial and Cemindo Gemilang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial 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.| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas Tbk |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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