Correlation Between Champion Pacific and Perusahaan Gas
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Perusahaan Gas 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 Perusahaan Gas 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 Perusahaan Gas Negara, you can compare the effects of market volatilities on Champion Pacific and Perusahaan Gas 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 Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Perusahaan Gas.
Diversification Opportunities for Champion Pacific and Perusahaan Gas
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Perusahaan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Perusahaan Gas Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Gas Negara 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 Perusahaan Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Gas Negara has no effect on the direction of Champion Pacific i.e., Champion Pacific and Perusahaan Gas go up and down completely randomly.
Pair Corralation between Champion Pacific and Perusahaan Gas
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 0.72 times more return on investment than Perusahaan Gas. However, Champion Pacific Indonesia is 1.39 times less risky than Perusahaan Gas. It trades about 0.02 of its potential returns per unit of risk. Perusahaan Gas Negara is currently generating about 0.01 per unit of risk. If you would invest 47,400 in Champion Pacific Indonesia on September 2, 2024 and sell it today you would earn a total of 3,100 from holding Champion Pacific Indonesia or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Perusahaan Gas Negara
Performance |
| Timeline |
| Champion Pacific Ind |
| Perusahaan Gas Negara |
Champion Pacific and Perusahaan Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Perusahaan Gas
The main advantage of trading using opposite Champion Pacific and Perusahaan Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Perusahaan Gas 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 Perusahaan Gas will offset losses from the drop in Perusahaan Gas' 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 |
| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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