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
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berlian and Citra is 0.06. 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 under-perform the Citra Marga. But the stock apears to be less risky and, when comparing its historical volatility, Berlian Laju Tanker is 1.61 times less risky than Citra Marga. The stock trades about -0.05 of its potential returns per unit of risk. The Citra Marga Nusaphala is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 144,000 in Citra Marga Nusaphala on October 26, 2024 and sell it today you would earn a total of 253,000 from holding Citra Marga Nusaphala or generate 175.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| 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. Bakrie Brothers Tbk | Berlian Laju vs. Bakrie Sumatera Plantations | Berlian Laju vs. Bakrieland Development Tbk | Berlian Laju vs. Energi Mega Persada |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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