Correlation Between Trias Sentosa and Champion Pacific
Can any of the company-specific risk be diversified away by investing in both Trias Sentosa and Champion Pacific 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 Trias Sentosa and Champion Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and Champion Pacific Indonesia, you can compare the effects of market volatilities on Trias Sentosa and Champion Pacific 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 Trias Sentosa with a short position of Champion Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Champion Pacific.
Diversification Opportunities for Trias Sentosa and Champion Pacific
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trias and Champion is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Champion Pacific Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Pacific Ind and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with Champion Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Pacific Ind has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Champion Pacific go up and down completely randomly.
Pair Corralation between Trias Sentosa and Champion Pacific
Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 1.38 times more return on investment than Champion Pacific. However, Trias Sentosa is 1.38 times more volatile than Champion Pacific Indonesia. It trades about 0.06 of its potential returns per unit of risk. Champion Pacific Indonesia is currently generating about 0.06 per unit of risk. If you would invest 49,800 in Trias Sentosa Tbk on November 2, 2024 and sell it today you would earn a total of 7,200 from holding Trias Sentosa Tbk or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Trias Sentosa Tbk vs. Champion Pacific Indonesia
Performance |
| Timeline |
| Trias Sentosa Tbk |
| Champion Pacific Ind |
Trias Sentosa and Champion Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trias Sentosa and Champion Pacific
The main advantage of trading using opposite Trias Sentosa and Champion Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa position performs unexpectedly, Champion Pacific 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 Champion Pacific will offset losses from the drop in Champion Pacific's long position.| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
| Champion Pacific vs. Intanwijaya Internasional Tbk | Champion Pacific vs. Asiaplast Industries Tbk | Champion Pacific vs. Trias Sentosa Tbk | Champion Pacific vs. Lotte Chemical Titan |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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