Correlation Between Super Energy and Campina Ice
Can any of the company-specific risk be diversified away by investing in both Super Energy 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 Super Energy and Campina Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Energy Tbk and Campina Ice Cream, you can compare the effects of market volatilities on Super Energy 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 Super Energy with a short position of Campina Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Energy and Campina Ice.
Diversification Opportunities for Super Energy and Campina Ice
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and Campina is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Super Energy Tbk 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 Super Energy 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 Super Energy Tbk 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 Super Energy i.e., Super Energy and Campina Ice go up and down completely randomly.
Pair Corralation between Super Energy and Campina Ice
Assuming the 90 days trading horizon Super Energy Tbk is expected to generate 2.0 times more return on investment than Campina Ice. However, Super Energy is 2.0 times more volatile than Campina Ice Cream. It trades about -0.01 of its potential returns per unit of risk. Campina Ice Cream is currently generating about -0.24 per unit of risk. If you would invest 237,000 in Super Energy Tbk on August 30, 2024 and sell it today you would lose (6,000) from holding Super Energy Tbk or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Energy Tbk vs. Campina Ice Cream
Performance |
| Timeline |
| Super Energy Tbk |
| Campina Ice Cream |
Super Energy and Campina Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Energy and Campina Ice
The main advantage of trading using opposite Super Energy and Campina Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Energy 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.| Super Energy vs. Petrosea Tbk | Super Energy vs. Harum Energy Tbk | Super Energy vs. Perdana Karya Perkasa | Super Energy vs. Bayan Resources Tbk |
| Campina Ice vs. Bakrieland Development Tbk | Campina Ice vs. Bakrie Brothers Tbk | Campina Ice vs. Energi Mega Persada | Campina Ice vs. Sampoerna Agro 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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