Correlation Between Champion Pacific and Supreme Cable
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Supreme Cable 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 Supreme Cable 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 Supreme Cable Manufacturing, you can compare the effects of market volatilities on Champion Pacific and Supreme Cable 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 Supreme Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Supreme Cable.
Diversification Opportunities for Champion Pacific and Supreme Cable
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Supreme is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Supreme Cable Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cable Manufa 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 Supreme Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cable Manufa has no effect on the direction of Champion Pacific i.e., Champion Pacific and Supreme Cable go up and down completely randomly.
Pair Corralation between Champion Pacific and Supreme Cable
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 2.74 times more return on investment than Supreme Cable. However, Champion Pacific is 2.74 times more volatile than Supreme Cable Manufacturing. It trades about 0.1 of its potential returns per unit of risk. Supreme Cable Manufacturing is currently generating about -0.21 per unit of risk. If you would invest 49,800 in Champion Pacific Indonesia on September 12, 2024 and sell it today you would earn a total of 2,200 from holding Champion Pacific Indonesia or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Supreme Cable Manufacturing
Performance |
| Timeline |
| Champion Pacific Ind |
| Supreme Cable Manufa |
Champion Pacific and Supreme Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Supreme Cable
The main advantage of trading using opposite Champion Pacific and Supreme Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Supreme Cable 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 Supreme Cable will offset losses from the drop in Supreme Cable'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 |
| Supreme Cable vs. PT Indonesia Kendaraan | Supreme Cable vs. Surya Toto Indonesia | Supreme Cable vs. Mitra Pinasthika Mustika | Supreme Cable vs. Integra Indocabinet 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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