Correlation Between Citra Putra and Indal Aluminium
Can any of the company-specific risk be diversified away by investing in both Citra Putra and Indal Aluminium 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 Putra and Indal Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citra Putra Realty and Indal Aluminium Industry, you can compare the effects of market volatilities on Citra Putra and Indal Aluminium 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 Putra with a short position of Indal Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Putra and Indal Aluminium.
Diversification Opportunities for Citra Putra and Indal Aluminium
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citra and Indal is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citra Putra Realty and Indal Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indal Aluminium Industry and Citra Putra 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 Putra Realty are associated (or correlated) with Indal Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indal Aluminium Industry has no effect on the direction of Citra Putra i.e., Citra Putra and Indal Aluminium go up and down completely randomly.
Pair Corralation between Citra Putra and Indal Aluminium
Assuming the 90 days trading horizon Citra Putra Realty is expected to generate 1.08 times more return on investment than Indal Aluminium. However, Citra Putra is 1.08 times more volatile than Indal Aluminium Industry. It trades about 0.36 of its potential returns per unit of risk. Indal Aluminium Industry is currently generating about -0.26 per unit of risk. If you would invest 24,200 in Citra Putra Realty on October 26, 2024 and sell it today you would earn a total of 14,800 from holding Citra Putra Realty or generate 61.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Putra Realty vs. Indal Aluminium Industry
Performance |
| Timeline |
| Citra Putra Realty |
| Indal Aluminium Industry |
Citra Putra and Indal Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Putra and Indal Aluminium
The main advantage of trading using opposite Citra Putra and Indal Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Putra position performs unexpectedly, Indal Aluminium 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 Indal Aluminium will offset losses from the drop in Indal Aluminium's long position.| Citra Putra vs. Hotel Fitra International | Citra Putra vs. Jasa Armada Indonesia | Citra Putra vs. Cahayaputra Asa Keramik | Citra Putra vs. Campina Ice Cream |
| Indal Aluminium vs. Intanwijaya Internasional Tbk | Indal Aluminium vs. Alumindo Light Metal | Indal Aluminium vs. Champion Pacific Indonesia | Indal Aluminium vs. Betonjaya Manunggal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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