Correlation Between Unggul Indah and Champion Pacific
Can any of the company-specific risk be diversified away by investing in both Unggul Indah 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 Unggul Indah and Champion Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Champion Pacific Indonesia, you can compare the effects of market volatilities on Unggul Indah 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 Unggul Indah with a short position of Champion Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Champion Pacific.
Diversification Opportunities for Unggul Indah and Champion Pacific
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Unggul and Champion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya 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 Unggul Indah 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 Unggul Indah Cahaya 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 Unggul Indah i.e., Unggul Indah and Champion Pacific go up and down completely randomly.
Pair Corralation between Unggul Indah and Champion Pacific
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to under-perform the Champion Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Unggul Indah Cahaya is 1.12 times less risky than Champion Pacific. The stock trades about -0.02 of its potential returns per unit of risk. The Champion Pacific Indonesia is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 46,800 in Champion Pacific Indonesia on November 27, 2024 and sell it today you would earn a total of 7,700 from holding Champion Pacific Indonesia or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Champion Pacific Indonesia
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Champion Pacific Ind |
Unggul Indah and Champion Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Champion Pacific
The main advantage of trading using opposite Unggul Indah and Champion Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah 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.| Unggul Indah vs. Trias Sentosa Tbk | Unggul Indah vs. Suparma Tbk | Unggul Indah vs. Tembaga Mulia Semanan | Unggul Indah vs. Surya Toto Indonesia |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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