Correlation Between Champion Pacific and Panca Budi
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Panca Budi 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 Panca Budi 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 Panca Budi Idaman, you can compare the effects of market volatilities on Champion Pacific and Panca Budi 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 Panca Budi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Panca Budi.
Diversification Opportunities for Champion Pacific and Panca Budi
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Panca is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Panca Budi Idaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Budi Idaman 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 Panca Budi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Budi Idaman has no effect on the direction of Champion Pacific i.e., Champion Pacific and Panca Budi go up and down completely randomly.
Pair Corralation between Champion Pacific and Panca Budi
Assuming the 90 days trading horizon Champion Pacific is expected to generate 3.49 times less return on investment than Panca Budi. But when comparing it to its historical volatility, Champion Pacific Indonesia is 1.33 times less risky than Panca Budi. It trades about 0.05 of its potential returns per unit of risk. Panca Budi Idaman is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 31,740 in Panca Budi Idaman on September 14, 2024 and sell it today you would earn a total of 23,260 from holding Panca Budi Idaman or generate 73.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.61% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Panca Budi Idaman
Performance |
| Timeline |
| Champion Pacific Ind |
| Panca Budi Idaman |
Champion Pacific and Panca Budi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Panca Budi
The main advantage of trading using opposite Champion Pacific and Panca Budi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Panca Budi 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 Panca Budi will offset losses from the drop in Panca Budi's long position.| Champion Pacific vs. Kedaung Indah Can | Champion Pacific vs. Kabelindo Murni Tbk | Champion Pacific vs. Bhuwanatala Indah Permai | Champion Pacific vs. Mitrabara Adiperdana PT |
| Panca Budi vs. Kedaung Indah Can | Panca Budi vs. Kabelindo Murni Tbk | Panca Budi vs. Champion Pacific Indonesia | Panca Budi vs. Bhuwanatala Indah Permai |
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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