Correlation Between Chitose Internasional and Pelayaran Kurnia

Can any of the company-specific risk be diversified away by investing in both Chitose Internasional and Pelayaran Kurnia 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 Chitose Internasional and Pelayaran Kurnia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chitose Internasional Tbk and Pelayaran Kurnia Lautan, you can compare the effects of market volatilities on Chitose Internasional and Pelayaran Kurnia 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 Chitose Internasional with a short position of Pelayaran Kurnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chitose Internasional and Pelayaran Kurnia.

Diversification Opportunities for Chitose Internasional and Pelayaran Kurnia

-0.22

Correlation Coefficient

Chitose Internasional  Pelayaran Kurnia

Very good diversification

The 3 months correlation between Chitose and Pelayaran is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chitose Internasional Tbk and Pelayaran Kurnia Lautan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelayaran Kurnia Lautan and Chitose Internasional 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 Chitose Internasional Tbk are associated (or correlated) with Pelayaran Kurnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelayaran Kurnia Lautan has no effect on the direction of Chitose Internasional i.e., Chitose Internasional and Pelayaran Kurnia go up and down completely randomly.

Pair Corralation between Chitose Internasional and Pelayaran Kurnia

Assuming the 90 days trading horizon Chitose Internasional Tbk is expected to generate 0.9 times more return on investment than Pelayaran Kurnia. However, Chitose Internasional Tbk is 1.11 times less risky than Pelayaran Kurnia. It trades about 0.0 of its potential returns per unit of risk. Pelayaran Kurnia Lautan is currently generating about -0.04 per unit of risk. If you would invest  18,700  in Chitose Internasional Tbk on October 14, 2024 and sell it today you would lose (1,200) from holding Chitose Internasional Tbk or give up 6.42% of portfolio value over 90 days.

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

Chitose Internasional Tbk  vs.  Pelayaran Kurnia Lautan

Chitose Internasional Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pelayaran Kurnia Lautan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pelayaran Kurnia Lautan 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Chitose Internasional and Pelayaran Kurnia

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

The idea behind Chitose Internasional Tbk and Pelayaran Kurnia Lautan 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.