Correlation Between Citigroup and Indah Kiat
Can any of the company-specific risk be diversified away by investing in both Citigroup and Indah Kiat 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 Citigroup and Indah Kiat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Indah Kiat Pulp, you can compare the effects of market volatilities on Citigroup and Indah Kiat 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 Citigroup with a short position of Indah Kiat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Indah Kiat.
Diversification Opportunities for Citigroup and Indah Kiat
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Indah is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Indah Kiat Pulp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indah Kiat Pulp and Citigroup 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 Citigroup are associated (or correlated) with Indah Kiat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indah Kiat Pulp has no effect on the direction of Citigroup i.e., Citigroup and Indah Kiat go up and down completely randomly.
Pair Corralation between Citigroup and Indah Kiat
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times more return on investment than Indah Kiat. However, Citigroup is 1.17 times more volatile than Indah Kiat Pulp. It trades about 0.25 of its potential returns per unit of risk. Indah Kiat Pulp is currently generating about -0.32 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Indah Kiat Pulp
Performance |
| Timeline |
| Citigroup |
| Indah Kiat Pulp |
Citigroup and Indah Kiat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Indah Kiat
The main advantage of trading using opposite Citigroup and Indah Kiat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Indah Kiat 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 Indah Kiat will offset losses from the drop in Indah Kiat's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Indah Kiat vs. Kedaung Indah Can | Indah Kiat vs. Langgeng Makmur Industri | Indah Kiat vs. Kabelindo Murni Tbk | Indah Kiat vs. Mustika Ratu 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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