Correlation Between Cita Mineral and Asiaplast Industries
Can any of the company-specific risk be diversified away by investing in both Cita Mineral and Asiaplast Industries 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 Cita Mineral and Asiaplast Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cita Mineral Investindo and Asiaplast Industries Tbk, you can compare the effects of market volatilities on Cita Mineral and Asiaplast Industries 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 Cita Mineral with a short position of Asiaplast Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cita Mineral and Asiaplast Industries.
Diversification Opportunities for Cita Mineral and Asiaplast Industries
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cita and Asiaplast is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cita Mineral Investindo and Asiaplast Industries Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiaplast Industries Tbk and Cita Mineral 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 Cita Mineral Investindo are associated (or correlated) with Asiaplast Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiaplast Industries Tbk has no effect on the direction of Cita Mineral i.e., Cita Mineral and Asiaplast Industries go up and down completely randomly.
Pair Corralation between Cita Mineral and Asiaplast Industries
Assuming the 90 days trading horizon Cita Mineral Investindo is expected to under-perform the Asiaplast Industries. But the stock apears to be less risky and, when comparing its historical volatility, Cita Mineral Investindo is 2.32 times less risky than Asiaplast Industries. The stock trades about -0.49 of its potential returns per unit of risk. The Asiaplast Industries Tbk is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 58,000 in Asiaplast Industries Tbk on October 26, 2024 and sell it today you would lose (4,500) from holding Asiaplast Industries Tbk or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cita Mineral Investindo vs. Asiaplast Industries Tbk
Performance |
| Timeline |
| Cita Mineral Investindo |
| Asiaplast Industries Tbk |
Cita Mineral and Asiaplast Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cita Mineral and Asiaplast Industries
The main advantage of trading using opposite Cita Mineral and Asiaplast Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cita Mineral position performs unexpectedly, Asiaplast Industries 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 Asiaplast Industries will offset losses from the drop in Asiaplast Industries' long position.| Cita Mineral vs. Asiaplast Industries Tbk | Cita Mineral vs. Argha Karya Prima | Cita Mineral vs. Indal Aluminium Industry | Cita Mineral vs. Alakasa Industrindo Tbk |
| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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