Correlation Between Cisarua Mountain and Bintang Samudera
Can any of the company-specific risk be diversified away by investing in both Cisarua Mountain and Bintang Samudera 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 Cisarua Mountain and Bintang Samudera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisarua Mountain Dairy and Bintang Samudera Mandiri, you can compare the effects of market volatilities on Cisarua Mountain and Bintang Samudera 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 Cisarua Mountain with a short position of Bintang Samudera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisarua Mountain and Bintang Samudera.
Diversification Opportunities for Cisarua Mountain and Bintang Samudera
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cisarua and Bintang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cisarua Mountain Dairy and Bintang Samudera Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Samudera Mandiri and Cisarua Mountain 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 Cisarua Mountain Dairy are associated (or correlated) with Bintang Samudera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Samudera Mandiri has no effect on the direction of Cisarua Mountain i.e., Cisarua Mountain and Bintang Samudera go up and down completely randomly.
Pair Corralation between Cisarua Mountain and Bintang Samudera
Assuming the 90 days trading horizon Cisarua Mountain Dairy is expected to generate 0.51 times more return on investment than Bintang Samudera. However, Cisarua Mountain Dairy is 1.96 times less risky than Bintang Samudera. It trades about 0.08 of its potential returns per unit of risk. Bintang Samudera Mandiri is currently generating about -0.02 per unit of risk. If you would invest 393,650 in Cisarua Mountain Dairy on August 25, 2024 and sell it today you would earn a total of 136,350 from holding Cisarua Mountain Dairy or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisarua Mountain Dairy vs. Bintang Samudera Mandiri
Performance |
| Timeline |
| Cisarua Mountain Dairy |
| Bintang Samudera Mandiri |
Cisarua Mountain and Bintang Samudera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisarua Mountain and Bintang Samudera
The main advantage of trading using opposite Cisarua Mountain and Bintang Samudera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisarua Mountain position performs unexpectedly, Bintang Samudera 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 Bintang Samudera will offset losses from the drop in Bintang Samudera's long position.| Cisarua Mountain vs. Avia Avian PT | Cisarua Mountain vs. Medikaloka Hermina PT | Cisarua Mountain vs. Dayamitra Telekomunikasi PT | Cisarua Mountain vs. Sumber Alfaria Trijaya |
| Bintang Samudera vs. Adaro Minerals Indonesia | Bintang Samudera vs. PT Hasnur Internasional | Bintang Samudera vs. RMK Energy PT | Bintang Samudera vs. Indo Pureco Pratama |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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