Correlation Between Champion Pacific and Asahimas Flat
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Asahimas Flat 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 Champion Pacific and Asahimas Flat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Pacific Indonesia and Asahimas Flat Glass, you can compare the effects of market volatilities on Champion Pacific and Asahimas Flat 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 Champion Pacific with a short position of Asahimas Flat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Asahimas Flat.
Diversification Opportunities for Champion Pacific and Asahimas Flat
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Asahimas is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Asahimas Flat Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahimas Flat Glass and Champion Pacific 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 Champion Pacific Indonesia are associated (or correlated) with Asahimas Flat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahimas Flat Glass has no effect on the direction of Champion Pacific i.e., Champion Pacific and Asahimas Flat go up and down completely randomly.
Pair Corralation between Champion Pacific and Asahimas Flat
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 4.72 times more return on investment than Asahimas Flat. However, Champion Pacific is 4.72 times more volatile than Asahimas Flat Glass. It trades about 0.03 of its potential returns per unit of risk. Asahimas Flat Glass is currently generating about -0.29 per unit of risk. If you would invest 50,000 in Champion Pacific Indonesia on September 2, 2024 and sell it today you would earn a total of 500.00 from holding Champion Pacific Indonesia or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Asahimas Flat Glass
Performance |
| Timeline |
| Champion Pacific Ind |
| Asahimas Flat Glass |
Champion Pacific and Asahimas Flat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Asahimas Flat
The main advantage of trading using opposite Champion Pacific and Asahimas Flat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Asahimas Flat 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 Asahimas Flat will offset losses from the drop in Asahimas Flat's long position.| Champion Pacific vs. Intanwijaya Internasional Tbk | Champion Pacific vs. Asiaplast Industries Tbk | Champion Pacific vs. Trias Sentosa Tbk | Champion Pacific vs. Lotte Chemical Titan |
| Asahimas Flat vs. Matahari Department Store | Asahimas Flat vs. Multi Medika Internasional | Asahimas Flat vs. Visi Media Asia | Asahimas Flat vs. Bayan Resources Tbk |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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