Correlation Between Unilever Indonesia and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Chandra Asri 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 Unilever Indonesia and Chandra Asri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Chandra Asri Petrochemical, you can compare the effects of market volatilities on Unilever Indonesia and Chandra Asri 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 Unilever Indonesia with a short position of Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Chandra Asri.
Diversification Opportunities for Unilever Indonesia and Chandra Asri
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unilever and Chandra is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Chandra Asri Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chandra Asri Petroch and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Chandra Asri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chandra Asri Petroch has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Chandra Asri go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Chandra Asri
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to generate 0.79 times more return on investment than Chandra Asri. However, Unilever Indonesia Tbk is 1.26 times less risky than Chandra Asri. It trades about -0.42 of its potential returns per unit of risk. Chandra Asri Petrochemical is currently generating about -0.4 per unit of risk. If you would invest 233,000 in Unilever Indonesia Tbk on August 24, 2024 and sell it today you would lose (57,500) from holding Unilever Indonesia Tbk or give up 24.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Chandra Asri Petroch |
Unilever Indonesia and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Chandra Asri
The main advantage of trading using opposite Unilever Indonesia and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Chandra Asri 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 Chandra Asri will offset losses from the drop in Chandra Asri's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Chandra Asri vs. Kedaung Indah Can | Chandra Asri vs. Langgeng Makmur Industri | Chandra Asri vs. Kabelindo Murni Tbk | Chandra Asri vs. Mustika Ratu 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |