Correlation Between Cahayaputra Asa and Bundamedik Tbk

Can any of the company-specific risk be diversified away by investing in both Cahayaputra Asa and Bundamedik Tbk 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 Cahayaputra Asa and Bundamedik Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cahayaputra Asa Keramik and Bundamedik Tbk PT, you can compare the effects of market volatilities on Cahayaputra Asa and Bundamedik Tbk 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 Cahayaputra Asa with a short position of Bundamedik Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cahayaputra Asa and Bundamedik Tbk.

Diversification Opportunities for Cahayaputra Asa and Bundamedik Tbk

-0.15

Correlation Coefficient

Cahayaputra Asa  Bundamedik Tbk

Good diversification

The 3 months correlation between Cahayaputra and Bundamedik is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and Bundamedik Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bundamedik Tbk PT and Cahayaputra Asa 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 Cahayaputra Asa Keramik are associated (or correlated) with Bundamedik Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bundamedik Tbk PT has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and Bundamedik Tbk go up and down completely randomly.

Pair Corralation between Cahayaputra Asa and Bundamedik Tbk

Assuming the 90 days trading horizon Cahayaputra Asa Keramik is expected to generate 1.1 times more return on investment than Bundamedik Tbk. However, Cahayaputra Asa is 1.1 times more volatile than Bundamedik Tbk PT. It trades about 0.0 of its potential returns per unit of risk. Bundamedik Tbk PT is currently generating about -0.11 per unit of risk. If you would invest  14,700  in Cahayaputra Asa Keramik on September 3, 2024 and sell it today you would lose (100.00) from holding Cahayaputra Asa Keramik or give up 0.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cahayaputra Asa Keramik  vs.  Bundamedik Tbk PT

Cahayaputra Asa Keramik

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cahayaputra Asa Keramik are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bundamedik Tbk PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bundamedik Tbk PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cahayaputra Asa and Bundamedik Tbk

The main advantage of trading using opposite Cahayaputra Asa and Bundamedik Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cahayaputra Asa position performs unexpectedly, Bundamedik Tbk 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 Bundamedik Tbk will offset losses from the drop in Bundamedik Tbk's long position.

The idea behind Cahayaputra Asa Keramik and Bundamedik Tbk PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.