Correlation Between Catur Sentosa and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Catur Sentosa and Charoen Pokphand 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 Catur Sentosa and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catur Sentosa Adiprana and Charoen Pokphand Indonesia, you can compare the effects of market volatilities on Catur Sentosa and Charoen Pokphand 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 Catur Sentosa with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catur Sentosa and Charoen Pokphand.
Diversification Opportunities for Catur Sentosa and Charoen Pokphand
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catur and Charoen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Catur Sentosa Adiprana and Charoen Pokphand Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Ind and Catur Sentosa 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 Catur Sentosa Adiprana are associated (or correlated) with Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Ind has no effect on the direction of Catur Sentosa i.e., Catur Sentosa and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Catur Sentosa and Charoen Pokphand
Assuming the 90 days trading horizon Catur Sentosa Adiprana is expected to generate 1.05 times more return on investment than Charoen Pokphand. However, Catur Sentosa is 1.05 times more volatile than Charoen Pokphand Indonesia. It trades about -0.14 of its potential returns per unit of risk. Charoen Pokphand Indonesia is currently generating about -0.19 per unit of risk. If you would invest 47,200 in Catur Sentosa Adiprana on September 3, 2024 and sell it today you would lose (2,200) from holding Catur Sentosa Adiprana or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catur Sentosa Adiprana vs. Charoen Pokphand Indonesia
Performance |
| Timeline |
| Catur Sentosa Adiprana |
| Charoen Pokphand Ind |
Catur Sentosa and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catur Sentosa and Charoen Pokphand
The main advantage of trading using opposite Catur Sentosa and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catur Sentosa position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| Catur Sentosa vs. Nusa Konstruksi Enjiniring | Catur Sentosa vs. Bukit Darmo Property | Catur Sentosa vs. Bayu Buana Tbk | Catur Sentosa vs. Astra Graphia Tbk |
| Charoen Pokphand vs. Japfa Comfeed Indonesia | Charoen Pokphand vs. Kalbe Farma Tbk | Charoen Pokphand vs. PT Indofood Sukses | Charoen Pokphand vs. Semen Indonesia Persero |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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