Correlation Between Citra Borneo and PT Jhonlin
Can any of the company-specific risk be diversified away by investing in both Citra Borneo and PT Jhonlin 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 Citra Borneo and PT Jhonlin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citra Borneo Utama and PT Jhonlin Agro, you can compare the effects of market volatilities on Citra Borneo and PT Jhonlin 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 Citra Borneo with a short position of PT Jhonlin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Borneo and PT Jhonlin.
Diversification Opportunities for Citra Borneo and PT Jhonlin
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citra and JARR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citra Borneo Utama and PT Jhonlin Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jhonlin Agro and Citra Borneo 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 Citra Borneo Utama are associated (or correlated) with PT Jhonlin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jhonlin Agro has no effect on the direction of Citra Borneo i.e., Citra Borneo and PT Jhonlin go up and down completely randomly.
Pair Corralation between Citra Borneo and PT Jhonlin
Assuming the 90 days trading horizon Citra Borneo Utama is expected to under-perform the PT Jhonlin. But the stock apears to be less risky and, when comparing its historical volatility, Citra Borneo Utama is 1.18 times less risky than PT Jhonlin. The stock trades about -0.04 of its potential returns per unit of risk. The PT Jhonlin Agro is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 29,600 in PT Jhonlin Agro on August 24, 2024 and sell it today you would lose (1,200) from holding PT Jhonlin Agro or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Borneo Utama vs. PT Jhonlin Agro
Performance |
| Timeline |
| Citra Borneo Utama |
| PT Jhonlin Agro |
Citra Borneo and PT Jhonlin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Borneo and PT Jhonlin
The main advantage of trading using opposite Citra Borneo and PT Jhonlin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Borneo position performs unexpectedly, PT Jhonlin 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 PT Jhonlin will offset losses from the drop in PT Jhonlin's long position.| Citra Borneo vs. Tridomain Performance Materials | Citra Borneo vs. Pertamina Geothermal Energy | Citra Borneo vs. Alumindo Light Metal | Citra Borneo vs. PT Jobubu Jarum |
| PT Jhonlin vs. PT Dewi Shri | PT Jhonlin vs. Habco Trans Maritima | PT Jhonlin vs. PT Cilacap Samudera | PT Jhonlin vs. PT Sari Kreasi |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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