Correlation Between HEXINDO ADIPERKASA and Charter Communications

Can any of the company-specific risk be diversified away by investing in both HEXINDO ADIPERKASA and Charter Communications 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 HEXINDO ADIPERKASA and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEXINDO ADIPERKASA and Charter Communications, you can compare the effects of market volatilities on HEXINDO ADIPERKASA and Charter Communications 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 HEXINDO ADIPERKASA with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXINDO ADIPERKASA and Charter Communications.

Diversification Opportunities for HEXINDO ADIPERKASA and Charter Communications

0.07

Correlation Coefficient

HEXINDO ADIPERKASA  Charter Communications

Significant diversification

The 3 months correlation between HEXINDO and Charter is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and Charter Communications go up and down completely randomly.

Pair Corralation between HEXINDO ADIPERKASA and Charter Communications

Assuming the 90 days trading horizon HEXINDO ADIPERKASA is expected to under-perform the Charter Communications. In addition to that, HEXINDO ADIPERKASA is 1.2 times more volatile than Charter Communications. It trades about -0.11 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.01 per unit of volatility. If you would invest  33,625  in Charter Communications on December 25, 2024 and sell it today you would earn a total of  125.00  from holding Charter Communications or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

HEXINDO ADIPERKASA  vs.  Charter Communications

HEXINDO ADIPERKASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Charter Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charter Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Charter Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HEXINDO ADIPERKASA and Charter Communications

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

The idea behind HEXINDO ADIPERKASA and Charter Communications 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.