Correlation Between Kedaung Indah and Champion Pacific
Can any of the company-specific risk be diversified away by investing in both Kedaung Indah 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 Kedaung Indah and Champion Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedaung Indah Can and Champion Pacific Indonesia, you can compare the effects of market volatilities on Kedaung Indah 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 Kedaung Indah with a short position of Champion Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Champion Pacific.
Diversification Opportunities for Kedaung Indah and Champion Pacific
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kedaung and Champion is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can 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 Kedaung Indah 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 Kedaung Indah Can 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 Kedaung Indah i.e., Kedaung Indah and Champion Pacific go up and down completely randomly.
Pair Corralation between Kedaung Indah and Champion Pacific
Assuming the 90 days trading horizon Kedaung Indah Can is expected to under-perform the Champion Pacific. In addition to that, Kedaung Indah is 2.79 times more volatile than Champion Pacific Indonesia. It trades about -0.43 of its total potential returns per unit of risk. Champion Pacific Indonesia is currently generating about -0.02 per unit of volatility. If you would invest 50,000 in Champion Pacific Indonesia on August 24, 2024 and sell it today you would lose (200.00) from holding Champion Pacific Indonesia or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kedaung Indah Can vs. Champion Pacific Indonesia
Performance |
| Timeline |
| Kedaung Indah Can |
| Champion Pacific Ind |
Kedaung Indah and Champion Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedaung Indah and Champion Pacific
The main advantage of trading using opposite Kedaung Indah and Champion Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah 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.| Kedaung Indah vs. Langgeng Makmur Industri | Kedaung Indah vs. Kedawung Setia Industrial | Kedaung Indah vs. Mustika Ratu Tbk | Kedaung Indah vs. Kabelindo Murni Tbk |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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