Correlation Between Chandra Asri and Hanjaya Mandala
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Hanjaya Mandala 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 Hanjaya Mandala 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 Hanjaya Mandala Sampoerna, you can compare the effects of market volatilities on Chandra Asri and Hanjaya Mandala 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 Hanjaya Mandala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Hanjaya Mandala.
Diversification Opportunities for Chandra Asri and Hanjaya Mandala
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chandra and Hanjaya is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Hanjaya Mandala Sampoerna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjaya Mandala Sampoerna 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 Hanjaya Mandala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjaya Mandala Sampoerna has no effect on the direction of Chandra Asri i.e., Chandra Asri and Hanjaya Mandala go up and down completely randomly.
Pair Corralation between Chandra Asri and Hanjaya Mandala
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Hanjaya Mandala. In addition to that, Chandra Asri is 3.54 times more volatile than Hanjaya Mandala Sampoerna. It trades about -0.25 of its total potential returns per unit of risk. Hanjaya Mandala Sampoerna is currently generating about -0.22 per unit of volatility. If you would invest 69,000 in Hanjaya Mandala Sampoerna on August 27, 2024 and sell it today you would lose (4,000) from holding Hanjaya Mandala Sampoerna or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Hanjaya Mandala Sampoerna
Performance |
| Timeline |
| Chandra Asri Petroch |
| Hanjaya Mandala Sampoerna |
Chandra Asri and Hanjaya Mandala Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Hanjaya Mandala
The main advantage of trading using opposite Chandra Asri and Hanjaya Mandala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Hanjaya Mandala 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 Hanjaya Mandala will offset losses from the drop in Hanjaya Mandala'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 |
| Hanjaya Mandala vs. Gudang Garam Tbk | Hanjaya Mandala vs. Unilever Indonesia Tbk | Hanjaya Mandala vs. Indofood Cbp Sukses | Hanjaya Mandala vs. PT Indofood Sukses |
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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