Correlation Between Champ Resto and Cipta Selera
Can any of the company-specific risk be diversified away by investing in both Champ Resto and Cipta Selera 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 Champ Resto and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champ Resto Indonesia and Cipta Selera Murni, you can compare the effects of market volatilities on Champ Resto and Cipta Selera 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 Champ Resto with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champ Resto and Cipta Selera.
Diversification Opportunities for Champ Resto and Cipta Selera
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champ and Cipta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Champ Resto Indonesia and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and Champ Resto 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 Champ Resto Indonesia are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Champ Resto i.e., Champ Resto and Cipta Selera go up and down completely randomly.
Pair Corralation between Champ Resto and Cipta Selera
Assuming the 90 days trading horizon Champ Resto Indonesia is expected to under-perform the Cipta Selera. In addition to that, Champ Resto is 6.53 times more volatile than Cipta Selera Murni. It trades about -0.18 of its total potential returns per unit of risk. Cipta Selera Murni is currently generating about 0.11 per unit of volatility. If you would invest 280,000 in Cipta Selera Murni on August 26, 2024 and sell it today you would earn a total of 13,000 from holding Cipta Selera Murni or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Champ Resto Indonesia vs. Cipta Selera Murni
Performance |
| Timeline |
| Champ Resto Indonesia |
| Cipta Selera Murni |
Champ Resto and Cipta Selera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champ Resto and Cipta Selera
The main advantage of trading using opposite Champ Resto and Cipta Selera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champ Resto position performs unexpectedly, Cipta Selera 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 Cipta Selera will offset losses from the drop in Cipta Selera's long position.| Champ Resto vs. Autopedia Sukses Lestari | Champ Resto vs. Adaro Minerals Indonesia | Champ Resto vs. Cisarua Mountain Dairy | Champ Resto vs. Avia Avian PT |
| Cipta Selera vs. PT Indofood Sukses | Cipta Selera vs. Indonesian Tobacco Tbk | Cipta Selera vs. Garudafood Putra Putri | Cipta Selera vs. PT Hatten Bali |
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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