Correlation Between Akr Corporindo and City Retail
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and City Retail 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 Akr Corporindo and City Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and City Retail Developments, you can compare the effects of market volatilities on Akr Corporindo and City Retail 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 Akr Corporindo with a short position of City Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and City Retail.
Diversification Opportunities for Akr Corporindo and City Retail
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akr and City is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and City Retail Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Retail Developments and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with City Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Retail Developments has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and City Retail go up and down completely randomly.
Pair Corralation between Akr Corporindo and City Retail
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to under-perform the City Retail. In addition to that, Akr Corporindo is 4.41 times more volatile than City Retail Developments. It trades about -0.12 of its total potential returns per unit of risk. City Retail Developments is currently generating about 0.0 per unit of volatility. If you would invest 13,500 in City Retail Developments on September 4, 2024 and sell it today you would earn a total of 0.00 from holding City Retail Developments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. City Retail Developments
Performance |
| Timeline |
| Akr Corporindo Tbk |
| City Retail Developments |
Akr Corporindo and City Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and City Retail
The main advantage of trading using opposite Akr Corporindo and City Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, City Retail 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 City Retail will offset losses from the drop in City Retail's long position.| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
| City Retail vs. Metropolitan Land Tbk | City Retail vs. Bekasi Fajar Industrial | City Retail vs. Greenwood Sejahtera Tbk | City Retail vs. Metropolitan Kentjana 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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