Correlation Between PT Charlie and Diamond Food
Can any of the company-specific risk be diversified away by investing in both PT Charlie and Diamond Food 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 PT Charlie and Diamond Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Charlie Hospital and Diamond Food Indonesia, you can compare the effects of market volatilities on PT Charlie and Diamond Food 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 PT Charlie with a short position of Diamond Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charlie and Diamond Food.
Diversification Opportunities for PT Charlie and Diamond Food
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between RSCH and Diamond is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PT Charlie Hospital and Diamond Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Food Indonesia and PT Charlie 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 PT Charlie Hospital are associated (or correlated) with Diamond Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Food Indonesia has no effect on the direction of PT Charlie i.e., PT Charlie and Diamond Food go up and down completely randomly.
Pair Corralation between PT Charlie and Diamond Food
Assuming the 90 days trading horizon PT Charlie Hospital is expected to generate 3.76 times more return on investment than Diamond Food. However, PT Charlie is 3.76 times more volatile than Diamond Food Indonesia. It trades about 0.09 of its potential returns per unit of risk. Diamond Food Indonesia is currently generating about 0.0 per unit of risk. If you would invest 13,100 in PT Charlie Hospital on August 30, 2024 and sell it today you would earn a total of 20,300 from holding PT Charlie Hospital or generate 154.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.27% |
| Values | Daily Returns |
PT Charlie Hospital vs. Diamond Food Indonesia
Performance |
| Timeline |
| PT Charlie Hospital |
| Diamond Food Indonesia |
PT Charlie and Diamond Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Charlie and Diamond Food
The main advantage of trading using opposite PT Charlie and Diamond Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charlie position performs unexpectedly, Diamond Food 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 Diamond Food will offset losses from the drop in Diamond Food's long position.| PT Charlie vs. Bank Central Asia | PT Charlie vs. Bank Rakyat Indonesia | PT Charlie vs. Bayan Resources Tbk | PT Charlie vs. Bank Mandiri Persero |
| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Campina Ice Cream | Diamond Food vs. Uni Charm Indonesia | Diamond Food vs. Sariguna Primatirta PT |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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