Correlation Between Steel Pipe and Cahayaputra Asa
Can any of the company-specific risk be diversified away by investing in both Steel Pipe and Cahayaputra Asa 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 Steel Pipe and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Pipe Industry and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Steel Pipe and Cahayaputra Asa 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 Steel Pipe with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Pipe and Cahayaputra Asa.
Diversification Opportunities for Steel Pipe and Cahayaputra Asa
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steel and Cahayaputra is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Steel Pipe Industry and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Steel Pipe 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 Steel Pipe Industry are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Steel Pipe i.e., Steel Pipe and Cahayaputra Asa go up and down completely randomly.
Pair Corralation between Steel Pipe and Cahayaputra Asa
Assuming the 90 days trading horizon Steel Pipe Industry is expected to generate 0.42 times more return on investment than Cahayaputra Asa. However, Steel Pipe Industry is 2.37 times less risky than Cahayaputra Asa. It trades about 0.0 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about -0.01 per unit of risk. If you would invest 28,680 in Steel Pipe Industry on September 3, 2024 and sell it today you would lose (280.00) from holding Steel Pipe Industry or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Pipe Industry vs. Cahayaputra Asa Keramik
Performance |
| Timeline |
| Steel Pipe Industry |
| Cahayaputra Asa Keramik |
Steel Pipe and Cahayaputra Asa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Pipe and Cahayaputra Asa
The main advantage of trading using opposite Steel Pipe and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Pipe position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.| Steel Pipe vs. Timah Persero Tbk | Steel Pipe vs. Semen Indonesia Persero | Steel Pipe vs. Mitra Pinasthika Mustika | Steel Pipe vs. Jakarta Int Hotels |
| Cahayaputra Asa vs. Gunawan Dianjaya Steel | Cahayaputra Asa vs. Yelooo Integra Datanet | Cahayaputra Asa vs. Arita Prima Indonesia | Cahayaputra Asa vs. Trisula Textile Industries |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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