Correlation Between Chandra Asri and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk, you can compare the effects of market volatilities on Chandra Asri and Indosat Tbk 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 Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Indosat Tbk.
Diversification Opportunities for Chandra Asri and Indosat Tbk
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chandra and Indosat is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat 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 Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of Chandra Asri i.e., Chandra Asri and Indosat Tbk go up and down completely randomly.
Pair Corralation between Chandra Asri and Indosat Tbk
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Indosat Tbk. In addition to that, Chandra Asri is 1.48 times more volatile than Indosat Tbk. It trades about -0.14 of its total potential returns per unit of risk. Indosat Tbk is currently generating about 0.0 per unit of volatility. If you would invest 241,000 in Indosat Tbk on September 4, 2024 and sell it today you would lose (3,000) from holding Indosat Tbk or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Indosat Tbk
Performance |
| Timeline |
| Chandra Asri Petroch |
| Indosat Tbk |
Chandra Asri and Indosat Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Indosat Tbk
The main advantage of trading using opposite Chandra Asri and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Indosat Tbk 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 Indosat Tbk will offset losses from the drop in Indosat Tbk'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 |
| Indosat Tbk vs. Energi Mega Persada | Indosat Tbk vs. Mitra Pinasthika Mustika | Indosat Tbk vs. Jakarta Int Hotels | Indosat Tbk vs. Inocycle Technology Tbk |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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