Correlation Between Chandra Asri and Dunia Virtual
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Dunia Virtual 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 Chandra Asri and Dunia Virtual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chandra Asri Petrochemical and Dunia Virtual Online, you can compare the effects of market volatilities on Chandra Asri and Dunia Virtual 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 Chandra Asri with a short position of Dunia Virtual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Dunia Virtual.
Diversification Opportunities for Chandra Asri and Dunia Virtual
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chandra and Dunia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Dunia Virtual Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunia Virtual Online and Chandra Asri 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 Chandra Asri Petrochemical are associated (or correlated) with Dunia Virtual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunia Virtual Online has no effect on the direction of Chandra Asri i.e., Chandra Asri and Dunia Virtual go up and down completely randomly.
Pair Corralation between Chandra Asri and Dunia Virtual
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Dunia Virtual. But the stock apears to be less risky and, when comparing its historical volatility, Chandra Asri Petrochemical is 1.63 times less risky than Dunia Virtual. The stock trades about -0.01 of its potential returns per unit of risk. The Dunia Virtual Online is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12,300 in Dunia Virtual Online on September 3, 2024 and sell it today you would earn a total of 9,300 from holding Dunia Virtual Online or generate 75.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Dunia Virtual Online
Performance |
| Timeline |
| Chandra Asri Petroch |
| Dunia Virtual Online |
Chandra Asri and Dunia Virtual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Dunia Virtual
The main advantage of trading using opposite Chandra Asri and Dunia Virtual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Dunia Virtual 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 Dunia Virtual will offset losses from the drop in Dunia Virtual's long position.| Chandra Asri vs. Timah Persero Tbk | Chandra Asri vs. Semen Indonesia Persero | Chandra Asri vs. Mitra Pinasthika Mustika | Chandra Asri vs. Jakarta Int Hotels |
| Dunia Virtual vs. Chandra Asri Petrochemical | Dunia Virtual vs. Bank Negara Indonesia | Dunia Virtual vs. Sumber Alfaria Trijaya | Dunia Virtual vs. Mitra Pinasthika Mustika |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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