Correlation Between Campina Ice and Prima Cakrawala

Can any of the company-specific risk be diversified away by investing in both Campina Ice and Prima Cakrawala 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 Campina Ice and Prima Cakrawala into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Campina Ice Cream and Prima Cakrawala Abadi, you can compare the effects of market volatilities on Campina Ice and Prima Cakrawala 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 Campina Ice with a short position of Prima Cakrawala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campina Ice and Prima Cakrawala.

Diversification Opportunities for Campina Ice and Prima Cakrawala

0.0

Correlation Coefficient

Campina Ice  Prima Cakrawala

Pay attention - limited upside

The 3 months correlation between Campina and Prima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Campina Ice Cream and Prima Cakrawala Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Cakrawala Abadi and Campina Ice 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 Campina Ice Cream are associated (or correlated) with Prima Cakrawala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Cakrawala Abadi has no effect on the direction of Campina Ice i.e., Campina Ice and Prima Cakrawala go up and down completely randomly.

Pair Corralation between Campina Ice and Prima Cakrawala

Assuming the 90 days trading horizon Campina Ice Cream is expected to generate 1.06 times more return on investment than Prima Cakrawala. However, Campina Ice is 1.06 times more volatile than Prima Cakrawala Abadi. It trades about 0.0 of its potential returns per unit of risk. Prima Cakrawala Abadi is currently generating about -0.01 per unit of risk. If you would invest  30,289  in Campina Ice Cream on October 27, 2024 and sell it today you would lose (9,289) from holding Campina Ice Cream or give up 30.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Campina Ice Cream  vs.  Prima Cakrawala Abadi

Campina Ice Cream

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Campina Ice Cream has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Prima Cakrawala Abadi

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Prima Cakrawala Abadi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Prima Cakrawala is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Campina Ice and Prima Cakrawala

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

The idea behind Campina Ice Cream and Prima Cakrawala Abadi 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.