Correlation Between Perusahaan Gas and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas 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 Perusahaan Gas and Chandra Asri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Chandra Asri Petrochemical, you can compare the effects of market volatilities on Perusahaan Gas 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 Perusahaan Gas with a short position of Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Chandra Asri.
Diversification Opportunities for Perusahaan Gas and Chandra Asri
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perusahaan and Chandra is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara 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 Perusahaan Gas 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 Perusahaan Gas Negara 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 Perusahaan Gas i.e., Perusahaan Gas and Chandra Asri go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Chandra Asri
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to under-perform the Chandra Asri. But the stock apears to be less risky and, when comparing its historical volatility, Perusahaan Gas Negara is 3.81 times less risky than Chandra Asri. The stock trades about -0.13 of its potential returns per unit of risk. The Chandra Asri Petrochemical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 700,000 in Chandra Asri Petrochemical on November 29, 2024 and sell it today you would earn a total of 55,000 from holding Chandra Asri Petrochemical or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Chandra Asri Petroch |
Perusahaan Gas and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Chandra Asri
The main advantage of trading using opposite Perusahaan Gas and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas 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.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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