Correlation Between Berlian Laju and Citra Marga
Can any of the company-specific risk be diversified away by investing in both Berlian Laju 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 Berlian Laju and Citra Marga into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berlian Laju Tanker and Citra Marga Nusaphala, you can compare the effects of market volatilities on Berlian Laju 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 Berlian Laju with a short position of Citra Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berlian Laju and Citra Marga.
Diversification Opportunities for Berlian Laju and Citra Marga
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berlian and Citra is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Berlian Laju Tanker 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 Berlian Laju 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 Berlian Laju Tanker 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 Berlian Laju i.e., Berlian Laju and Citra Marga go up and down completely randomly.
Pair Corralation between Berlian Laju and Citra Marga
Assuming the 90 days trading horizon Berlian Laju Tanker is expected to generate 8.85 times more return on investment than Citra Marga. However, Berlian Laju is 8.85 times more volatile than Citra Marga Nusaphala. It trades about -0.02 of its potential returns per unit of risk. Citra Marga Nusaphala is currently generating about -0.19 per unit of risk. If you would invest 2,200 in Berlian Laju Tanker on August 24, 2024 and sell it today you would lose (100.00) from holding Berlian Laju Tanker or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berlian Laju Tanker vs. Citra Marga Nusaphala
Performance |
| Timeline |
| Berlian Laju Tanker |
| Citra Marga Nusaphala |
Berlian Laju and Citra Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berlian Laju and Citra Marga
The main advantage of trading using opposite Berlian Laju and Citra Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berlian Laju 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.| Berlian Laju vs. Samudera Indonesia Tbk | Berlian Laju vs. Steady Safe TBK | Berlian Laju vs. Rukun Raharja Tbk | Berlian Laju vs. PT Temas Tbk |
| Citra Marga vs. Samudera Indonesia Tbk | Citra Marga vs. Steady Safe TBK | Citra Marga vs. Rukun Raharja Tbk | Citra Marga vs. PT Temas 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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