Correlation Between Campina Ice and Integra Indocabinet

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

Diversification Opportunities for Campina Ice and Integra Indocabinet

-0.36

Correlation Coefficient

Campina Ice  Integra Indocabinet

Very good diversification

The 3 months correlation between Campina and Integra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Campina Ice Cream and Integra Indocabinet Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Indocabinet Tbk 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 Integra Indocabinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Indocabinet Tbk has no effect on the direction of Campina Ice i.e., Campina Ice and Integra Indocabinet go up and down completely randomly.

Pair Corralation between Campina Ice and Integra Indocabinet

Assuming the 90 days trading horizon Campina Ice Cream is expected to generate 1.27 times more return on investment than Integra Indocabinet. However, Campina Ice is 1.27 times more volatile than Integra Indocabinet Tbk. It trades about 0.02 of its potential returns per unit of risk. Integra Indocabinet Tbk is currently generating about 0.0 per unit of risk. If you would invest  25,962  in Campina Ice Cream on September 3, 2024 and sell it today you would earn a total of  238.00  from holding Campina Ice Cream or generate 0.92% return on investment over 90 days.

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

Campina Ice Cream  vs.  Integra Indocabinet Tbk

Campina Ice Cream

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Integra Indocabinet Tbk

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Campina Ice and Integra Indocabinet

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

The idea behind Campina Ice Cream and Integra Indocabinet Tbk 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.