Correlation Between Champion Pacific and Semen Baturaja
Can any of the company-specific risk be diversified away by investing in both Champion Pacific and Semen Baturaja 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 Semen Baturaja 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 Semen Baturaja Persero, you can compare the effects of market volatilities on Champion Pacific and Semen Baturaja 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 Semen Baturaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Semen Baturaja.
Diversification Opportunities for Champion Pacific and Semen Baturaja
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Semen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia and Semen Baturaja Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Baturaja Persero 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 Semen Baturaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Baturaja Persero has no effect on the direction of Champion Pacific i.e., Champion Pacific and Semen Baturaja go up and down completely randomly.
Pair Corralation between Champion Pacific and Semen Baturaja
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 1.6 times more return on investment than Semen Baturaja. However, Champion Pacific is 1.6 times more volatile than Semen Baturaja Persero. It trades about 0.06 of its potential returns per unit of risk. Semen Baturaja Persero is currently generating about -0.02 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 1,200 from holding Champion Pacific Indonesia or generate 2.41% 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. Semen Baturaja Persero
Performance |
| Timeline |
| Champion Pacific Ind |
| Semen Baturaja Persero |
Champion Pacific and Semen Baturaja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Semen Baturaja
The main advantage of trading using opposite Champion Pacific and Semen Baturaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific position performs unexpectedly, Semen Baturaja 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 Semen Baturaja will offset losses from the drop in Semen Baturaja'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 |
| Semen Baturaja vs. Kedaung Indah Can | Semen Baturaja vs. Kabelindo Murni Tbk | Semen Baturaja vs. Champion Pacific Indonesia | Semen Baturaja 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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