Correlation Between Citra Marga and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Citra Marga and Kalbe Farma 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 Kalbe Farma 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 Kalbe Farma Tbk, you can compare the effects of market volatilities on Citra Marga and Kalbe Farma 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 Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Kalbe Farma.
Diversification Opportunities for Citra Marga and Kalbe Farma
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citra and Kalbe is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma 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 Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Citra Marga i.e., Citra Marga and Kalbe Farma go up and down completely randomly.
Pair Corralation between Citra Marga and Kalbe Farma
Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to generate 0.79 times more return on investment than Kalbe Farma. However, Citra Marga Nusaphala is 1.26 times less risky than Kalbe Farma. It trades about -0.04 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.04 per unit of risk. If you would invest 172,500 in Citra Marga Nusaphala on August 28, 2024 and sell it today you would lose (30,500) from holding Citra Marga Nusaphala or give up 17.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Marga Nusaphala vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Citra Marga Nusaphala |
| Kalbe Farma Tbk |
Citra Marga and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Marga and Kalbe Farma
The main advantage of trading using opposite Citra Marga and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Marga position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Citra Marga vs. Berlian Laju Tanker | Citra Marga vs. Solusi Bangun Indonesia | Citra Marga vs. Kawasan Industri Jababeka | Citra Marga vs. Mnc Investama Tbk |
| Kalbe Farma vs. Astra Graphia Tbk | Kalbe Farma vs. Hexindo Adiperkasa Tbk | Kalbe Farma vs. Lautan Luas Tbk | Kalbe Farma vs. Citra Marga Nusaphala |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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