Correlation Between Capital Financial and Lini Imaji
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Lini Imaji 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 Lini Imaji 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 Lini Imaji Kreasi, you can compare the effects of market volatilities on Capital Financial and Lini Imaji 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 Lini Imaji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Lini Imaji.
Diversification Opportunities for Capital Financial and Lini Imaji
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Lini is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Lini Imaji Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lini Imaji Kreasi 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 Lini Imaji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lini Imaji Kreasi has no effect on the direction of Capital Financial i.e., Capital Financial and Lini Imaji go up and down completely randomly.
Pair Corralation between Capital Financial and Lini Imaji
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to under-perform the Lini Imaji. But the stock apears to be less risky and, when comparing its historical volatility, Capital Financial Indonesia is 4.89 times less risky than Lini Imaji. The stock trades about -0.16 of its potential returns per unit of risk. The Lini Imaji Kreasi is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 7,100 in Lini Imaji Kreasi on September 4, 2024 and sell it today you would earn a total of 9,600 from holding Lini Imaji Kreasi or generate 135.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Lini Imaji Kreasi
Performance |
| Timeline |
| Capital Financial |
| Lini Imaji Kreasi |
Capital Financial and Lini Imaji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Lini Imaji
The main advantage of trading using opposite Capital Financial and Lini Imaji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Lini Imaji 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 Lini Imaji will offset losses from the drop in Lini Imaji's long position.| Capital Financial vs. Paninvest Tbk | Capital Financial vs. Mitra Pinasthika Mustika | Capital Financial vs. Jakarta Int Hotels | Capital Financial vs. Asuransi Harta Aman |
| Lini Imaji vs. Cisarua Mountain Dairy | Lini Imaji vs. PT Wahana Interfood | Lini Imaji vs. Equity Development Investment | Lini Imaji vs. HK Metals Utama |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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