Correlation Between Chandra Asri and Vastland Indonesia
Can any of the company-specific risk be diversified away by investing in both Chandra Asri and Vastland Indonesia 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 Vastland Indonesia 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 Vastland Indonesia, you can compare the effects of market volatilities on Chandra Asri and Vastland Indonesia 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 Vastland Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Vastland Indonesia.
Diversification Opportunities for Chandra Asri and Vastland Indonesia
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chandra and Vastland is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Vastland Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastland Indonesia 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 Vastland Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastland Indonesia has no effect on the direction of Chandra Asri i.e., Chandra Asri and Vastland Indonesia go up and down completely randomly.
Pair Corralation between Chandra Asri and Vastland Indonesia
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Vastland Indonesia. In addition to that, Chandra Asri is 1.64 times more volatile than Vastland Indonesia. It trades about -0.09 of its total potential returns per unit of risk. Vastland Indonesia is currently generating about 0.07 per unit of volatility. If you would invest 7,200 in Vastland Indonesia on August 30, 2024 and sell it today you would earn a total of 400.00 from holding Vastland Indonesia or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Vastland Indonesia
Performance |
| Timeline |
| Chandra Asri Petroch |
| Vastland Indonesia |
Chandra Asri and Vastland Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Vastland Indonesia
The main advantage of trading using opposite Chandra Asri and Vastland Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri position performs unexpectedly, Vastland Indonesia 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 Vastland Indonesia will offset losses from the drop in Vastland Indonesia'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 |
| Vastland Indonesia vs. Bank Central Asia | Vastland Indonesia vs. Bank Rakyat Indonesia | Vastland Indonesia vs. Bayan Resources Tbk | Vastland Indonesia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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