Correlation Between Surya Permata and Campina Ice
Can any of the company-specific risk be diversified away by investing in both Surya Permata and Campina Ice 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 Surya Permata and Campina Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Permata Andalan and Campina Ice Cream, you can compare the effects of market volatilities on Surya Permata and Campina Ice 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 Surya Permata with a short position of Campina Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Permata and Campina Ice.
Diversification Opportunities for Surya Permata and Campina Ice
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Surya and Campina is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Surya Permata Andalan and Campina Ice Cream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campina Ice Cream and Surya Permata 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 Surya Permata Andalan are associated (or correlated) with Campina Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campina Ice Cream has no effect on the direction of Surya Permata i.e., Surya Permata and Campina Ice go up and down completely randomly.
Pair Corralation between Surya Permata and Campina Ice
Assuming the 90 days trading horizon Surya Permata Andalan is expected to generate 0.95 times more return on investment than Campina Ice. However, Surya Permata Andalan is 1.06 times less risky than Campina Ice. It trades about 0.07 of its potential returns per unit of risk. Campina Ice Cream is currently generating about -0.05 per unit of risk. If you would invest 14,100 in Surya Permata Andalan on September 3, 2024 and sell it today you would earn a total of 300.00 from holding Surya Permata Andalan or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Permata Andalan vs. Campina Ice Cream
Performance |
| Timeline |
| Surya Permata Andalan |
| Campina Ice Cream |
Surya Permata and Campina Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Permata and Campina Ice
The main advantage of trading using opposite Surya Permata and Campina Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Permata position performs unexpectedly, Campina Ice 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 Campina Ice will offset losses from the drop in Campina Ice's long position.| Surya Permata vs. Campina Ice Cream | Surya Permata vs. Mitra Pinasthika Mustika | Surya Permata vs. Jakarta Int Hotels | Surya Permata vs. Indosat Tbk |
| Campina Ice vs. Sariguna Primatirta PT | Campina Ice vs. Garudafood Putra Putri | Campina Ice vs. Buyung Poetra Sembada | Campina Ice vs. Integra Indocabinet Tbk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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