Correlation Between Chandra Asri and Era Media
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Era Media 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 Era Media 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 Era Media Sejahtera, you can compare the effects of market volatilities on Chandra Asri and Era Media 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 Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Era Media.
Diversification Opportunities for Chandra Asri and Era Media
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chandra and Era is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera 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 Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of Chandra Asri i.e., Chandra Asri and Era Media go up and down completely randomly.
Pair Corralation between Chandra Asri and Era Media
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to generate 0.71 times more return on investment than Era Media. However, Chandra Asri Petrochemical is 1.41 times less risky than Era Media. It trades about 0.08 of its potential returns per unit of risk. Era Media Sejahtera is currently generating about -0.01 per unit of risk. 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 Together |
| Strength | Significant |
| Accuracy | 80.13% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Era Media Sejahtera
Performance |
| Timeline |
| Chandra Asri Petroch |
| Era Media Sejahtera |
Chandra Asri and Era Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Era Media
The main advantage of trading using opposite Chandra Asri and Era Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Era Media 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 Era Media will offset losses from the drop in Era Media'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 |
| Era Media vs. Chandra Asri Petrochemical | Era Media vs. Bank Negara Indonesia | Era Media vs. Sumber Alfaria Trijaya | Era Media 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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