Correlation Between Champion Pacific and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Intanwijaya Internasional 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 Intanwijaya Internasional 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 Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Champion Pacific and Intanwijaya Internasional 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 Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Intanwijaya Internasional.
Diversification Opportunities for Champion Pacific and Intanwijaya Internasional
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Champion and Intanwijaya is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional 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 Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Champion Pacific i.e., Champion Pacific and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Champion Pacific and Intanwijaya Internasional
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 0.75 times more return on investment than Intanwijaya Internasional. However, Champion Pacific Indonesia is 1.33 times less risky than Intanwijaya Internasional. It trades about 0.04 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about 0.03 per unit of risk. If you would invest 43,200 in Champion Pacific Indonesia on August 28, 2024 and sell it today you would earn a total of 7,300 from holding Champion Pacific Indonesia or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Champion Pacific Ind |
| Intanwijaya Internasional |
Champion Pacific and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Intanwijaya Internasional
The main advantage of trading using opposite Champion Pacific and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional'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 |
| Intanwijaya Internasional vs. Kedaung Indah Can | Intanwijaya Internasional vs. Langgeng Makmur Industri | Intanwijaya Internasional vs. Kabelindo Murni Tbk | Intanwijaya Internasional vs. Mustika Ratu 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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