Correlation Between Charnic Capital and Asuransi Bina

Can any of the company-specific risk be diversified away by investing in both Charnic Capital and Asuransi Bina 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 Charnic Capital and Asuransi Bina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charnic Capital Tbk and Asuransi Bina Dana, you can compare the effects of market volatilities on Charnic Capital and Asuransi Bina 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 Charnic Capital with a short position of Asuransi Bina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charnic Capital and Asuransi Bina.

Diversification Opportunities for Charnic Capital and Asuransi Bina

-0.21

Correlation Coefficient

Charnic Capital  Asuransi Bina

Very good diversification

The 3 months correlation between Charnic and Asuransi is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Charnic Capital Tbk and Asuransi Bina Dana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bina Dana and Charnic Capital 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 Charnic Capital Tbk are associated (or correlated) with Asuransi Bina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bina Dana has no effect on the direction of Charnic Capital i.e., Charnic Capital and Asuransi Bina go up and down completely randomly.

Pair Corralation between Charnic Capital and Asuransi Bina

Assuming the 90 days trading horizon Charnic Capital Tbk is expected to generate 2.04 times more return on investment than Asuransi Bina. However, Charnic Capital is 2.04 times more volatile than Asuransi Bina Dana. It trades about 0.04 of its potential returns per unit of risk. Asuransi Bina Dana is currently generating about -0.14 per unit of risk. If you would invest  26,000  in Charnic Capital Tbk on February 17, 2024 and sell it today you would earn a total of  1,000.00  from holding Charnic Capital Tbk or generate 3.85% return on investment over 90 days.

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

Charnic Capital Tbk  vs.  Asuransi Bina Dana

Charnic Capital Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Charnic Capital Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Charnic Capital may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Asuransi Bina Dana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Bina Dana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Charnic Capital and Asuransi Bina

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

The idea behind Charnic Capital Tbk and Asuransi Bina Dana 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.