Correlation Between Chandra Asri and Fast Food
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Fast Food 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 Fast Food 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 Fast Food Indonesia, you can compare the effects of market volatilities on Chandra Asri and Fast Food 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Fast Food.
Diversification Opportunities for Chandra Asri and Fast Food
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chandra and Fast is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Chandra Asri i.e., Chandra Asri and Fast Food go up and down completely randomly.
Pair Corralation between Chandra Asri and Fast Food
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to generate 1.57 times more return on investment than Fast Food. However, Chandra Asri is 1.57 times more volatile than Fast Food Indonesia. It trades about 0.09 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.08 per unit of risk. If you would invest 224,312 in Chandra Asri Petrochemical on November 27, 2024 and sell it today you would earn a total of 575,688 from holding Chandra Asri Petrochemical or generate 256.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Fast Food Indonesia
Performance |
| Timeline |
| Chandra Asri Petroch |
| Fast Food Indonesia |
Chandra Asri and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Fast Food
The main advantage of trading using opposite Chandra Asri and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |