Correlation Between Indo Pureco and Champ Resto
Can any of the company-specific risk be diversified away by investing in both Indo Pureco and Champ Resto 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 Indo Pureco and Champ Resto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Pureco Pratama and Champ Resto Indonesia, you can compare the effects of market volatilities on Indo Pureco and Champ Resto 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 Indo Pureco with a short position of Champ Resto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Pureco and Champ Resto.
Diversification Opportunities for Indo Pureco and Champ Resto
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Champ is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Indo Pureco Pratama and Champ Resto Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champ Resto Indonesia and Indo Pureco 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 Indo Pureco Pratama are associated (or correlated) with Champ Resto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champ Resto Indonesia has no effect on the direction of Indo Pureco i.e., Indo Pureco and Champ Resto go up and down completely randomly.
Pair Corralation between Indo Pureco and Champ Resto
Assuming the 90 days trading horizon Indo Pureco Pratama is expected to under-perform the Champ Resto. In addition to that, Indo Pureco is 1.53 times more volatile than Champ Resto Indonesia. It trades about -0.09 of its total potential returns per unit of risk. Champ Resto Indonesia is currently generating about -0.1 per unit of volatility. If you would invest 129,500 in Champ Resto Indonesia on August 25, 2024 and sell it today you would lose (77,000) from holding Champ Resto Indonesia or give up 59.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.07% |
| Values | Daily Returns |
Indo Pureco Pratama vs. Champ Resto Indonesia
Performance |
| Timeline |
| Indo Pureco Pratama |
| Champ Resto Indonesia |
Indo Pureco and Champ Resto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Pureco and Champ Resto
The main advantage of trading using opposite Indo Pureco and Champ Resto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Pureco position performs unexpectedly, Champ Resto 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 Champ Resto will offset losses from the drop in Champ Resto's long position.| Indo Pureco vs. Bank Central Asia | Indo Pureco vs. Bank Rakyat Indonesia | Indo Pureco vs. Bayan Resources Tbk | Indo Pureco vs. Bank Mandiri Persero |
| Champ Resto vs. Autopedia Sukses Lestari | Champ Resto vs. Adaro Minerals Indonesia | Champ Resto vs. Cisarua Mountain Dairy | Champ Resto vs. Avia Avian PT |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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