Correlation Between Mustika Ratu and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu and Chandra Asri 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 Mustika Ratu and Chandra Asri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustika Ratu Tbk and Chandra Asri Petrochemical, you can compare the effects of market volatilities on Mustika Ratu and Chandra Asri 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 Mustika Ratu with a short position of Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Chandra Asri.
Diversification Opportunities for Mustika Ratu and Chandra Asri
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mustika and Chandra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu Tbk and Chandra Asri Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chandra Asri Petroch and Mustika Ratu 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 Mustika Ratu Tbk are associated (or correlated) with Chandra Asri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chandra Asri Petroch has no effect on the direction of Mustika Ratu i.e., Mustika Ratu and Chandra Asri go up and down completely randomly.
Pair Corralation between Mustika Ratu and Chandra Asri
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to under-perform the Chandra Asri. But the stock apears to be less risky and, when comparing its historical volatility, Mustika Ratu Tbk is 1.05 times less risky than Chandra Asri. The stock trades about -0.04 of its potential returns per unit of risk. The Chandra Asri Petrochemical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 235,278 in Chandra Asri Petrochemical on August 28, 2024 and sell it today you would earn a total of 462,222 from holding Chandra Asri Petrochemical or generate 196.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Chandra Asri Petroch |
Mustika Ratu and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Chandra Asri
The main advantage of trading using opposite Mustika Ratu and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu position performs unexpectedly, Chandra Asri 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 Chandra Asri will offset losses from the drop in Chandra Asri's long position.The idea behind Mustika Ratu Tbk and Chandra Asri Petrochemical 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.| Chandra Asri vs. Barito Pacific Tbk | Chandra Asri vs. Pabrik Kertas Tjiwi | Chandra Asri vs. Charoen Pokphand Indonesia | Chandra Asri vs. Indah Kiat Pulp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |