Correlation Between Chandra Asri and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo, you can compare the effects of market volatilities on Chandra Asri and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Hoffmen Cleanindo.
Diversification Opportunities for Chandra Asri and Hoffmen Cleanindo
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chandra and Hoffmen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Chandra Asri i.e., Chandra Asri and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Chandra Asri and Hoffmen Cleanindo
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Hoffmen Cleanindo. In addition to that, Chandra Asri is 2.15 times more volatile than Hoffmen Cleanindo. It trades about -0.16 of its total potential returns per unit of risk. Hoffmen Cleanindo is currently generating about -0.21 per unit of volatility. If you would invest 17,200 in Hoffmen Cleanindo on September 3, 2024 and sell it today you would lose (1,700) from holding Hoffmen Cleanindo or give up 9.88% 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. Hoffmen Cleanindo
Performance |
| Timeline |
| Chandra Asri Petroch |
| Hoffmen Cleanindo |
Chandra Asri and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Hoffmen Cleanindo
The main advantage of trading using opposite Chandra Asri and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo'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 |
| Hoffmen Cleanindo vs. Chandra Asri Petrochemical | Hoffmen Cleanindo vs. Bank Negara Indonesia | Hoffmen Cleanindo vs. Sumber Alfaria Trijaya | Hoffmen Cleanindo vs. Mitra Pinasthika Mustika |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |