Correlation Between Indofood Cbp and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and Chandra Asri 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 Indofood Cbp and Chandra Asri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood Cbp Sukses and Chandra Asri Petrochemical, you can compare the effects of market volatilities on Indofood Cbp and Chandra Asri 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 Indofood Cbp with a short position of Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and Chandra Asri.
Diversification Opportunities for Indofood Cbp and Chandra Asri
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indofood and Chandra is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and Chandra Asri Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chandra Asri Petroch and Indofood Cbp 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 Indofood Cbp Sukses are associated (or correlated) with Chandra Asri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chandra Asri Petroch has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and Chandra Asri go up and down completely randomly.
Pair Corralation between Indofood Cbp and Chandra Asri
Assuming the 90 days trading horizon Indofood Cbp is expected to generate 5.85 times less return on investment than Chandra Asri. But when comparing it to its historical volatility, Indofood Cbp Sukses is 2.3 times less risky than Chandra Asri. It trades about 0.03 of its potential returns per unit of risk. Chandra Asri Petrochemical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 245,248 in Chandra Asri Petrochemical on September 3, 2024 and sell it today you would earn a total of 452,252 from holding Chandra Asri Petrochemical or generate 184.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Indofood Cbp Sukses |
| Chandra Asri Petroch |
Indofood Cbp and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and Chandra Asri
The main advantage of trading using opposite Indofood Cbp and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, Chandra Asri 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 Chandra Asri will offset losses from the drop in Chandra Asri's long position.| Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. Telkom Indonesia Tbk | Indofood Cbp vs. Bank Mandiri Persero |
| Chandra Asri vs. Timah Persero Tbk | Chandra Asri vs. Semen Indonesia Persero | Chandra Asri vs. Mitra Pinasthika Mustika | Chandra Asri vs. Jakarta Int Hotels |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |