Correlation Between Chandra Asri and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa Tbk, you can compare the effects of market volatilities on Chandra Asri and Indo Kordsa 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 Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Indo Kordsa.
Diversification Opportunities for Chandra Asri and Indo Kordsa
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chandra and Indo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk 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 Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Chandra Asri i.e., Chandra Asri and Indo Kordsa go up and down completely randomly.
Pair Corralation between Chandra Asri and Indo Kordsa
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Indo Kordsa. In addition to that, Chandra Asri is 1.4 times more volatile than Indo Kordsa Tbk. It trades about -0.18 of its total potential returns per unit of risk. Indo Kordsa Tbk is currently generating about 0.04 per unit of volatility. If you would invest 574,269 in Indo Kordsa Tbk on August 29, 2024 and sell it today you would earn a total of 10,731 from holding Indo Kordsa Tbk or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Chandra Asri Petroch |
| Indo Kordsa Tbk |
Chandra Asri and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Indo Kordsa
The main advantage of trading using opposite Chandra Asri and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa'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 |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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