Correlation Between Cahayaputra Asa and PT Harapan

Can any of the company-specific risk be diversified away by investing in both Cahayaputra Asa and PT Harapan 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 PT Harapan 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 PT Harapan Duta, you can compare the effects of market volatilities on Cahayaputra Asa and PT Harapan 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 PT Harapan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cahayaputra Asa and PT Harapan.

Diversification Opportunities for Cahayaputra Asa and PT Harapan

-0.37

Correlation Coefficient

Cahayaputra Asa  PT Harapan

Very good diversification

The 3 months correlation between Cahayaputra and HOPE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and PT Harapan Duta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Harapan Duta 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 PT Harapan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Harapan Duta has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and PT Harapan go up and down completely randomly.

Pair Corralation between Cahayaputra Asa and PT Harapan

Assuming the 90 days trading horizon Cahayaputra Asa Keramik is expected to under-perform the PT Harapan. But the stock apears to be less risky and, when comparing its historical volatility, Cahayaputra Asa Keramik is 3.56 times less risky than PT Harapan. The stock trades about -0.08 of its potential returns per unit of risk. The PT Harapan Duta is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,500  in PT Harapan Duta on December 24, 2024 and sell it today you would earn a total of  1,500  from holding PT Harapan Duta or generate 60.0% return on investment over 90 days.

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

Cahayaputra Asa Keramik  vs.  PT Harapan Duta

Cahayaputra Asa Keramik

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cahayaputra Asa Keramik 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.

PT Harapan Duta

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Harapan Duta are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Harapan disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cahayaputra Asa and PT Harapan

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

The idea behind Cahayaputra Asa Keramik and PT Harapan Duta 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.