Correlation Between Intanwijaya Internasional and Champion Pacific
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Champion Pacific 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 Intanwijaya Internasional and Champion Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intanwijaya Internasional Tbk and Champion Pacific Indonesia, you can compare the effects of market volatilities on Intanwijaya Internasional and Champion Pacific 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 Intanwijaya Internasional with a short position of Champion Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Champion Pacific.
Diversification Opportunities for Intanwijaya Internasional and Champion Pacific
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intanwijaya and Champion is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Champion Pacific Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Pacific Ind and Intanwijaya Internasional 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 Intanwijaya Internasional Tbk are associated (or correlated) with Champion Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Pacific Ind has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Champion Pacific go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Champion Pacific
Assuming the 90 days trading horizon Intanwijaya Internasional is expected to generate 6.91 times less return on investment than Champion Pacific. But when comparing it to its historical volatility, Intanwijaya Internasional Tbk is 1.56 times less risky than Champion Pacific. It trades about 0.01 of its potential returns per unit of risk. Champion Pacific Indonesia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 49,600 in Champion Pacific Indonesia on November 2, 2024 and sell it today you would earn a total of 4,900 from holding Champion Pacific Indonesia or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Champion Pacific Indonesia
Performance |
| Timeline |
| Intanwijaya Internasional |
| Champion Pacific Ind |
Intanwijaya Internasional and Champion Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Champion Pacific
The main advantage of trading using opposite Intanwijaya Internasional and Champion Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Champion Pacific 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 Champion Pacific will offset losses from the drop in Champion Pacific's long position.The idea behind Intanwijaya Internasional Tbk and Champion Pacific Indonesia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Champion Pacific vs. Intanwijaya Internasional Tbk | Champion Pacific vs. Asiaplast Industries Tbk | Champion Pacific vs. Trias Sentosa Tbk | Champion Pacific vs. Lotte Chemical Titan |
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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