Correlation Between Chandra Asri and Trimitra Propertindo
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Trimitra Propertindo 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 Trimitra Propertindo 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 Trimitra Propertindo Tbk, you can compare the effects of market volatilities on Chandra Asri and Trimitra Propertindo 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 Trimitra Propertindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Trimitra Propertindo.
Diversification Opportunities for Chandra Asri and Trimitra Propertindo
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chandra and Trimitra is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Trimitra Propertindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Propertindo 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 Trimitra Propertindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Propertindo Tbk has no effect on the direction of Chandra Asri i.e., Chandra Asri and Trimitra Propertindo go up and down completely randomly.
Pair Corralation between Chandra Asri and Trimitra Propertindo
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to generate 1.63 times more return on investment than Trimitra Propertindo. However, Chandra Asri is 1.63 times more volatile than Trimitra Propertindo Tbk. It trades about -0.18 of its potential returns per unit of risk. Trimitra Propertindo Tbk is currently generating about -0.36 per unit of risk. If you would invest 892,500 in Chandra Asri Petrochemical on August 30, 2024 and sell it today you would lose (175,000) from holding Chandra Asri Petrochemical or give up 19.61% 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. Trimitra Propertindo Tbk
Performance |
| Timeline |
| Chandra Asri Petroch |
| Trimitra Propertindo Tbk |
Chandra Asri and Trimitra Propertindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Trimitra Propertindo
The main advantage of trading using opposite Chandra Asri and Trimitra Propertindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Trimitra Propertindo 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 Trimitra Propertindo will offset losses from the drop in Trimitra Propertindo'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 |
| Trimitra Propertindo vs. Bakrie Brothers Tbk | Trimitra Propertindo vs. Bakrie Sumatera Plantations | Trimitra Propertindo vs. Energi Mega Persada | Trimitra Propertindo vs. Darma Henwa 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |