Correlation Between Citra Marga and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Citra Marga and Astra Graphia 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 Marga and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citra Marga Nusaphala and Astra Graphia Tbk, you can compare the effects of market volatilities on Citra Marga and Astra Graphia 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 Marga with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Astra Graphia.
Diversification Opportunities for Citra Marga and Astra Graphia
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citra and Astra is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Astra Graphia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Graphia Tbk and Citra Marga 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 Marga Nusaphala are associated (or correlated) with Astra Graphia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Graphia Tbk has no effect on the direction of Citra Marga i.e., Citra Marga and Astra Graphia go up and down completely randomly.
Pair Corralation between Citra Marga and Astra Graphia
Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to under-perform the Astra Graphia. But the stock apears to be less risky and, when comparing its historical volatility, Citra Marga Nusaphala is 1.15 times less risky than Astra Graphia. The stock trades about -0.05 of its potential returns per unit of risk. The Astra Graphia Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 82,166 in Astra Graphia Tbk on August 28, 2024 and sell it today you would earn a total of 3,834 from holding Astra Graphia Tbk or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Marga Nusaphala vs. Astra Graphia Tbk
Performance |
| Timeline |
| Citra Marga Nusaphala |
| Astra Graphia Tbk |
Citra Marga and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Marga and Astra Graphia
The main advantage of trading using opposite Citra Marga and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Marga position performs unexpectedly, Astra Graphia 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 Astra Graphia will offset losses from the drop in Astra Graphia's long position.The idea behind Citra Marga Nusaphala and Astra Graphia Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Astra Graphia vs. Astra Otoparts Tbk | Astra Graphia vs. Citra Marga Nusaphala | Astra Graphia vs. Hexindo Adiperkasa Tbk | Astra Graphia vs. Metrodata Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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