Correlation Between Chandra Asri and Bank Maybank
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Bank Maybank 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 Bank Maybank 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 Bank Maybank Indonesia, you can compare the effects of market volatilities on Chandra Asri and Bank Maybank 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 Bank Maybank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Bank Maybank.
Diversification Opportunities for Chandra Asri and Bank Maybank
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chandra and Bank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Bank Maybank Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Maybank Indonesia 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 Bank Maybank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Maybank Indonesia has no effect on the direction of Chandra Asri i.e., Chandra Asri and Bank Maybank go up and down completely randomly.
Pair Corralation between Chandra Asri and Bank Maybank
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Bank Maybank. In addition to that, Chandra Asri is 5.02 times more volatile than Bank Maybank Indonesia. It trades about -0.21 of its total potential returns per unit of risk. Bank Maybank Indonesia is currently generating about -0.25 per unit of volatility. If you would invest 22,800 in Bank Maybank Indonesia on September 1, 2024 and sell it today you would lose (1,200) from holding Bank Maybank Indonesia or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Bank Maybank Indonesia
Performance |
| Timeline |
| Chandra Asri Petroch |
| Bank Maybank Indonesia |
Chandra Asri and Bank Maybank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Bank Maybank
The main advantage of trading using opposite Chandra Asri and Bank Maybank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Bank Maybank 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 Bank Maybank will offset losses from the drop in Bank Maybank's long position.| Chandra Asri vs. Barito Pacific Tbk | Chandra Asri vs. Pabrik Kertas Tjiwi | Chandra Asri vs. Charoen Pokphand Indonesia | Chandra Asri vs. Indah Kiat Pulp |
| Bank Maybank vs. Bank Cimb Niaga | Bank Maybank vs. Bank Danamon Indonesia | Bank Maybank vs. Bank Pan Indonesia | Bank Maybank vs. Bank Permata 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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