Correlation Between Champion Pacific and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and PP Presisi 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 PP Presisi 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 PP Presisi Tbk, you can compare the effects of market volatilities on Champion Pacific and PP Presisi 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 PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and PP Presisi.
Diversification Opportunities for Champion Pacific and PP Presisi
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and PPRE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk 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 PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Champion Pacific i.e., Champion Pacific and PP Presisi go up and down completely randomly.
Pair Corralation between Champion Pacific and PP Presisi
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 0.4 times more return on investment than PP Presisi. However, Champion Pacific Indonesia is 2.51 times less risky than PP Presisi. It trades about 0.02 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.03 per unit of risk. If you would invest 47,400 in Champion Pacific Indonesia on September 4, 2024 and sell it today you would earn a total of 2,600 from holding Champion Pacific Indonesia or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. PP Presisi Tbk
Performance |
| Timeline |
| Champion Pacific Ind |
| PP Presisi Tbk |
Champion Pacific and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and PP Presisi
The main advantage of trading using opposite Champion Pacific and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi'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 |
| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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