Correlation Between Citra Marga and Supreme Cable
Can any of the company-specific risk be diversified away by investing in both Citra Marga and Supreme Cable 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 Supreme Cable 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 Supreme Cable Manufacturing, you can compare the effects of market volatilities on Citra Marga and Supreme Cable 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 Supreme Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Supreme Cable.
Diversification Opportunities for Citra Marga and Supreme Cable
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citra and Supreme is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Supreme Cable Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cable Manufa 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 Supreme Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cable Manufa has no effect on the direction of Citra Marga i.e., Citra Marga and Supreme Cable go up and down completely randomly.
Pair Corralation between Citra Marga and Supreme Cable
Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to under-perform the Supreme Cable. But the stock apears to be less risky and, when comparing its historical volatility, Citra Marga Nusaphala is 2.02 times less risky than Supreme Cable. The stock trades about -0.19 of its potential returns per unit of risk. The Supreme Cable Manufacturing is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 222,000 in Supreme Cable Manufacturing on August 24, 2024 and sell it today you would lose (2,000) from holding Supreme Cable Manufacturing or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citra Marga Nusaphala vs. Supreme Cable Manufacturing
Performance |
| Timeline |
| Citra Marga Nusaphala |
| Supreme Cable Manufa |
Citra Marga and Supreme Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citra Marga and Supreme Cable
The main advantage of trading using opposite Citra Marga and Supreme Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citra Marga position performs unexpectedly, Supreme Cable 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 Supreme Cable will offset losses from the drop in Supreme Cable's long position.| Citra Marga vs. Samudera Indonesia Tbk | Citra Marga vs. Steady Safe TBK | Citra Marga vs. Rukun Raharja Tbk | Citra Marga vs. PT Temas Tbk |
| Supreme Cable vs. Voksel Electric Tbk | Supreme Cable vs. Kmi Wire And | Supreme Cable vs. Kabelindo Murni Tbk | Supreme Cable vs. Selamat Sempurna 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |