Correlation Between Timah Persero and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Timah Persero 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 Timah Persero and Chandra Asri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timah Persero Tbk and Chandra Asri Petrochemical, you can compare the effects of market volatilities on Timah Persero 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 Timah Persero with a short position of Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timah Persero and Chandra Asri.
Diversification Opportunities for Timah Persero and Chandra Asri
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Timah and Chandra is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Timah Persero 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 Timah Persero 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 Timah Persero 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 Timah Persero i.e., Timah Persero and Chandra Asri go up and down completely randomly.
Pair Corralation between Timah Persero and Chandra Asri
Assuming the 90 days trading horizon Timah Persero is expected to generate 10.81 times less return on investment than Chandra Asri. But when comparing it to its historical volatility, Timah Persero Tbk is 1.25 times less risky than Chandra Asri. It trades about 0.01 of its potential returns per unit of risk. Chandra Asri Petrochemical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 246,245 in Chandra Asri Petrochemical on September 4, 2024 and sell it today you would earn a total of 451,255 from holding Chandra Asri Petrochemical or generate 183.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Timah Persero Tbk vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Timah Persero Tbk |
| Chandra Asri Petroch |
Timah Persero and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timah Persero and Chandra Asri
The main advantage of trading using opposite Timah Persero and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timah Persero 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.| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
| Chandra Asri vs. Timah Persero Tbk | Chandra Asri vs. Semen Indonesia Persero | Chandra Asri vs. Mitra Pinasthika Mustika | Chandra Asri vs. Jakarta Int Hotels |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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