Correlation Between Cipta Selera and Pudjiadi Sons
Can any of the company-specific risk be diversified away by investing in both Cipta Selera and Pudjiadi Sons 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 Cipta Selera and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipta Selera Murni and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Cipta Selera and Pudjiadi Sons 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 Cipta Selera with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipta Selera and Pudjiadi Sons.
Diversification Opportunities for Cipta Selera and Pudjiadi Sons
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cipta and Pudjiadi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cipta Selera Murni and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and Cipta Selera 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 Cipta Selera Murni are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Cipta Selera i.e., Cipta Selera and Pudjiadi Sons go up and down completely randomly.
Pair Corralation between Cipta Selera and Pudjiadi Sons
Assuming the 90 days trading horizon Cipta Selera is expected to generate 15.08 times less return on investment than Pudjiadi Sons. But when comparing it to its historical volatility, Cipta Selera Murni is 9.61 times less risky than Pudjiadi Sons. It trades about 0.31 of its potential returns per unit of risk. Pudjiadi Sons Tbk is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 45,400 in Pudjiadi Sons Tbk on September 4, 2024 and sell it today you would earn a total of 90,600 from holding Pudjiadi Sons Tbk or generate 199.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cipta Selera Murni vs. Pudjiadi Sons Tbk
Performance |
| Timeline |
| Cipta Selera Murni |
| Pudjiadi Sons Tbk |
Cipta Selera and Pudjiadi Sons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipta Selera and Pudjiadi Sons
The main advantage of trading using opposite Cipta Selera and Pudjiadi Sons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipta Selera position performs unexpectedly, Pudjiadi Sons 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 Pudjiadi Sons will offset losses from the drop in Pudjiadi Sons' long position.| Cipta Selera vs. Protech Mitra Perkasa | Cipta Selera vs. Ace Hardware Indonesia | Cipta Selera vs. Bank Ocbc Nisp | Cipta Selera vs. PT Charlie Hospital |
| Pudjiadi Sons vs. Mahaka Media Tbk | Pudjiadi Sons vs. HK Metals Utama | Pudjiadi Sons vs. Bekasi Fajar Industrial | Pudjiadi Sons vs. Era Media Sejahtera |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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