Correlation Between Chandra Asri and PT Charlie
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and PT Charlie 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 PT Charlie 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 PT Charlie Hospital, you can compare the effects of market volatilities on Chandra Asri and PT Charlie 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 PT Charlie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and PT Charlie.
Diversification Opportunities for Chandra Asri and PT Charlie
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chandra and RSCH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and PT Charlie Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Charlie Hospital 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 PT Charlie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Charlie Hospital has no effect on the direction of Chandra Asri i.e., Chandra Asri and PT Charlie go up and down completely randomly.
Pair Corralation between Chandra Asri and PT Charlie
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to generate 2.1 times more return on investment than PT Charlie. However, Chandra Asri is 2.1 times more volatile than PT Charlie Hospital. It trades about 0.13 of its potential returns per unit of risk. PT Charlie Hospital is currently generating about -0.2 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. PT Charlie Hospital
Performance |
| Timeline |
| Chandra Asri Petroch |
| PT Charlie Hospital |
Chandra Asri and PT Charlie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and PT Charlie
The main advantage of trading using opposite Chandra Asri and PT Charlie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, PT Charlie 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 PT Charlie will offset losses from the drop in PT Charlie'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 |
| PT Charlie vs. Bank Central Asia | PT Charlie vs. Bank Rakyat Indonesia | PT Charlie vs. Bayan Resources Tbk | PT Charlie vs. Bank Mandiri Persero |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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