Correlation Between Chandra Asri and First Media
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and First 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 First 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 First Media Tbk, you can compare the effects of market volatilities on Chandra Asri and First 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 First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and First Media.
Diversification Opportunities for Chandra Asri and First Media
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chandra and First is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and First Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Media 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 First Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Media Tbk has no effect on the direction of Chandra Asri i.e., Chandra Asri and First Media go up and down completely randomly.
Pair Corralation between Chandra Asri and First Media
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to generate 3.07 times more return on investment than First Media. However, Chandra Asri is 3.07 times more volatile than First Media Tbk. It trades about 0.13 of its potential returns per unit of risk. First Media Tbk is currently generating about -0.15 per unit of risk. If you would invest 705,000 in Chandra Asri Petrochemical on September 12, 2024 and sell it today you would earn a total of 82,500 from holding Chandra Asri Petrochemical or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. First Media Tbk
Performance |
| Timeline |
| Chandra Asri Petroch |
| First Media Tbk |
Chandra Asri and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and First Media
The main advantage of trading using opposite Chandra Asri and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, First 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 First Media will offset losses from the drop in First Media'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 |
| First Media vs. Mnc Land Tbk | First Media vs. MNC Vision Networks | First Media vs. MD Pictures Tbk | First Media vs. Link Net 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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