Correlation Between Capital Financial and Maskapai Reasuransi
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Maskapai Reasuransi 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 Maskapai Reasuransi 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 Maskapai Reasuransi Indonesia, you can compare the effects of market volatilities on Capital Financial and Maskapai Reasuransi 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 Maskapai Reasuransi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Maskapai Reasuransi.
Diversification Opportunities for Capital Financial and Maskapai Reasuransi
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Maskapai is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Maskapai Reasuransi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maskapai Reasuransi 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 Maskapai Reasuransi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maskapai Reasuransi has no effect on the direction of Capital Financial i.e., Capital Financial and Maskapai Reasuransi go up and down completely randomly.
Pair Corralation between Capital Financial and Maskapai Reasuransi
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to generate 0.97 times more return on investment than Maskapai Reasuransi. However, Capital Financial Indonesia is 1.03 times less risky than Maskapai Reasuransi. It trades about 0.27 of its potential returns per unit of risk. Maskapai Reasuransi Indonesia is currently generating about 0.14 per unit of risk. If you would invest 52,500 in Capital Financial Indonesia on October 25, 2024 and sell it today you would earn a total of 5,500 from holding Capital Financial Indonesia or generate 10.48% 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. Maskapai Reasuransi Indonesia
Performance |
| Timeline |
| Capital Financial |
| Maskapai Reasuransi |
Capital Financial and Maskapai Reasuransi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Maskapai Reasuransi
The main advantage of trading using opposite Capital Financial and Maskapai Reasuransi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Maskapai Reasuransi 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 Maskapai Reasuransi will offset losses from the drop in Maskapai Reasuransi's long position.| Capital Financial vs. Bank Mnc Internasional | Capital Financial vs. Bank Qnb Indonesia | Capital Financial vs. Bank Victoria International | Capital Financial vs. Bank Rakyat Indonesia |
| Maskapai Reasuransi vs. Lippo General Insurance | Maskapai Reasuransi vs. Paninvest Tbk | Maskapai Reasuransi vs. Mandala Multifinance Tbk | Maskapai Reasuransi vs. Bank Mayapada Internasional |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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