Correlation Between Abm Investama and Citra Marga
Can any of the company-specific risk be diversified away by investing in both Abm Investama and Citra Marga 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 Abm Investama and Citra Marga into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abm Investama Tbk and Citra Marga Nusaphala, you can compare the effects of market volatilities on Abm Investama and Citra Marga 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 Abm Investama with a short position of Citra Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abm Investama and Citra Marga.
Diversification Opportunities for Abm Investama and Citra Marga
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abm and Citra is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Abm Investama Tbk and Citra Marga Nusaphala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Marga Nusaphala and Abm Investama 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 Abm Investama Tbk are associated (or correlated) with Citra Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Marga Nusaphala has no effect on the direction of Abm Investama i.e., Abm Investama and Citra Marga go up and down completely randomly.
Pair Corralation between Abm Investama and Citra Marga
Assuming the 90 days trading horizon Abm Investama Tbk is expected to generate 1.54 times more return on investment than Citra Marga. However, Abm Investama is 1.54 times more volatile than Citra Marga Nusaphala. It trades about 0.04 of its potential returns per unit of risk. Citra Marga Nusaphala is currently generating about -0.03 per unit of risk. If you would invest 275,727 in Abm Investama Tbk on August 31, 2024 and sell it today you would earn a total of 74,273 from holding Abm Investama Tbk or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abm Investama Tbk vs. Citra Marga Nusaphala
Performance |
| Timeline |
| Abm Investama Tbk |
| Citra Marga Nusaphala |
Abm Investama and Citra Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abm Investama and Citra Marga
The main advantage of trading using opposite Abm Investama and Citra Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abm Investama position performs unexpectedly, Citra Marga 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 Citra Marga will offset losses from the drop in Citra Marga's long position.| Abm Investama vs. Baramulti Suksessarana Tbk | Abm Investama vs. Mitrabara Adiperdana PT | Abm Investama vs. Sumber Alfaria Trijaya | Abm Investama vs. Surya Esa Perkasa |
| Citra Marga vs. Berlian Laju Tanker | Citra Marga vs. Solusi Bangun Indonesia | Citra Marga vs. Kawasan Industri Jababeka | Citra Marga vs. Mnc Investama Tbk |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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