Correlation Between Cahayaputra Asa and Singaraja Putra

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

Diversification Opportunities for Cahayaputra Asa and Singaraja Putra

0.25

Correlation Coefficient

Cahayaputra Asa  Singaraja Putra

Modest diversification

The 3 months correlation between Cahayaputra and Singaraja is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and Singaraja Putra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singaraja Putra 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 Singaraja Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singaraja Putra has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and Singaraja Putra go up and down completely randomly.

Pair Corralation between Cahayaputra Asa and Singaraja Putra

Assuming the 90 days trading horizon Cahayaputra Asa is expected to generate 17.12 times less return on investment than Singaraja Putra. But when comparing it to its historical volatility, Cahayaputra Asa Keramik is 1.65 times less risky than Singaraja Putra. It trades about 0.03 of its potential returns per unit of risk. Singaraja Putra is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  71,000  in Singaraja Putra on September 1, 2024 and sell it today you would earn a total of  379,000  from holding Singaraja Putra or generate 533.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cahayaputra Asa Keramik  vs.  Singaraja Putra

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.

Singaraja Putra

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Cahayaputra Asa and Singaraja Putra

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

The idea behind Cahayaputra Asa Keramik and Singaraja Putra 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.