Correlation Between Citra Marga and Bangun Karya
Can any of the company-specific risk be diversified away by investing in both Citra Marga and Bangun Karya 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 Bangun Karya 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 Bangun Karya Perkasa, you can compare the effects of market volatilities on Citra Marga and Bangun Karya 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 Bangun Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Bangun Karya.
Diversification Opportunities for Citra Marga and Bangun Karya
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citra and Bangun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Bangun Karya Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangun Karya Perkasa 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 Bangun Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangun Karya Perkasa has no effect on the direction of Citra Marga i.e., Citra Marga and Bangun Karya go up and down completely randomly.
Pair Corralation between Citra Marga and Bangun Karya
Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to under-perform the Bangun Karya. But the stock apears to be less risky and, when comparing its historical volatility, Citra Marga Nusaphala is 2.7 times less risky than Bangun Karya. The stock trades about -0.14 of its potential returns per unit of risk. The Bangun Karya Perkasa is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,600 in Bangun Karya Perkasa on August 28, 2024 and sell it today you would lose (100.00) from holding Bangun Karya Perkasa or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Marga Nusaphala vs. Bangun Karya Perkasa
Performance |
| Timeline |
| Citra Marga Nusaphala |
| Bangun Karya Perkasa |
Citra Marga and Bangun Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Marga and Bangun Karya
The main advantage of trading using opposite Citra Marga and Bangun Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Marga position performs unexpectedly, Bangun Karya 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 Bangun Karya will offset losses from the drop in Bangun Karya'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 |
| Bangun Karya vs. Indo Kordsa Tbk | Bangun Karya vs. Wilmar Cahaya Indonesia | Bangun Karya vs. Citra Marga Nusaphala | Bangun Karya vs. Darya Varia Laboratoria 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 Managers module to screen money managers from public funds and ETFs managed around the world.
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