Correlation Between Chandra Asri and Geoprima Solusi
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Geoprima Solusi 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 Geoprima Solusi 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 Geoprima Solusi Tbk, you can compare the effects of market volatilities on Chandra Asri and Geoprima Solusi 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 Geoprima Solusi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Geoprima Solusi.
Diversification Opportunities for Chandra Asri and Geoprima Solusi
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chandra and Geoprima is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Geoprima Solusi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geoprima Solusi 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 Geoprima Solusi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geoprima Solusi Tbk has no effect on the direction of Chandra Asri i.e., Chandra Asri and Geoprima Solusi go up and down completely randomly.
Pair Corralation between Chandra Asri and Geoprima Solusi
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Geoprima Solusi. But the stock apears to be less risky and, when comparing its historical volatility, Chandra Asri Petrochemical is 2.26 times less risky than Geoprima Solusi. The stock trades about 0.0 of its potential returns per unit of risk. The Geoprima Solusi Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 24,000 in Geoprima Solusi Tbk on November 28, 2024 and sell it today you would earn a total of 14,000 from holding Geoprima Solusi Tbk or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Geoprima Solusi Tbk
Performance |
| Timeline |
| Chandra Asri Petroch |
| Geoprima Solusi Tbk |
Chandra Asri and Geoprima Solusi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Geoprima Solusi
The main advantage of trading using opposite Chandra Asri and Geoprima Solusi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Geoprima Solusi 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 Geoprima Solusi will offset losses from the drop in Geoprima Solusi'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 |
| Geoprima Solusi vs. Pacific Strategic Financial | Geoprima Solusi vs. Garuda Metalindo Tbk | Geoprima Solusi vs. Metrodata Electronics Tbk | Geoprima Solusi vs. Lippo General Insurance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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