Correlation Between Eterindo Wahanatama and Champion Pacific
Can any of the company-specific risk be diversified away by investing in both Eterindo Wahanatama and Champion Pacific 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 Eterindo Wahanatama and Champion Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eterindo Wahanatama Tbk and Champion Pacific Indonesia, you can compare the effects of market volatilities on Eterindo Wahanatama and Champion Pacific 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 Eterindo Wahanatama with a short position of Champion Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eterindo Wahanatama and Champion Pacific.
Diversification Opportunities for Eterindo Wahanatama and Champion Pacific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eterindo and Champion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eterindo Wahanatama Tbk and Champion Pacific Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Pacific Ind and Eterindo Wahanatama 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 Eterindo Wahanatama Tbk are associated (or correlated) with Champion Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Pacific Ind has no effect on the direction of Eterindo Wahanatama i.e., Eterindo Wahanatama and Champion Pacific go up and down completely randomly.
Pair Corralation between Eterindo Wahanatama and Champion Pacific
Assuming the 90 days trading horizon Eterindo Wahanatama Tbk is expected to under-perform the Champion Pacific. In addition to that, Eterindo Wahanatama is 2.56 times more volatile than Champion Pacific Indonesia. It trades about -0.05 of its total potential returns per unit of risk. Champion Pacific Indonesia is currently generating about 0.04 per unit of volatility. If you would invest 42,200 in Champion Pacific Indonesia on August 31, 2024 and sell it today you would earn a total of 8,300 from holding Champion Pacific Indonesia or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Eterindo Wahanatama Tbk vs. Champion Pacific Indonesia
Performance |
| Timeline |
| Eterindo Wahanatama Tbk |
| Champion Pacific Ind |
Eterindo Wahanatama and Champion Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eterindo Wahanatama and Champion Pacific
The main advantage of trading using opposite Eterindo Wahanatama and Champion Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eterindo Wahanatama position performs unexpectedly, Champion Pacific 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 Champion Pacific will offset losses from the drop in Champion Pacific's long position.| Eterindo Wahanatama vs. Budi Starch Sweetener | Eterindo Wahanatama vs. Intanwijaya Internasional Tbk | Eterindo Wahanatama vs. Duta Pertiwi Nusantara | Eterindo Wahanatama vs. Champion Pacific Indonesia |
| Champion Pacific vs. Perusahaan Gas Negara | Champion Pacific vs. Vale Indonesia Tbk | Champion Pacific vs. Telkom Indonesia Tbk | Champion Pacific vs. Mitra Pinasthika Mustika |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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