Correlation Between Ciputra Development and Adhi Karya
Can any of the company-specific risk be diversified away by investing in both Ciputra Development and Adhi 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 Ciputra Development and Adhi Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciputra Development Tbk and Adhi Karya Persero, you can compare the effects of market volatilities on Ciputra Development and Adhi 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 Ciputra Development with a short position of Adhi Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciputra Development and Adhi Karya.
Diversification Opportunities for Ciputra Development and Adhi Karya
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ciputra and Adhi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ciputra Development Tbk and Adhi Karya Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adhi Karya Persero and Ciputra Development 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 Ciputra Development Tbk are associated (or correlated) with Adhi Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adhi Karya Persero has no effect on the direction of Ciputra Development i.e., Ciputra Development and Adhi Karya go up and down completely randomly.
Pair Corralation between Ciputra Development and Adhi Karya
Assuming the 90 days trading horizon Ciputra Development Tbk is expected to under-perform the Adhi Karya. In addition to that, Ciputra Development is 1.51 times more volatile than Adhi Karya Persero. It trades about -0.26 of its total potential returns per unit of risk. Adhi Karya Persero is currently generating about -0.14 per unit of volatility. If you would invest 28,400 in Adhi Karya Persero on August 28, 2024 and sell it today you would lose (1,800) from holding Adhi Karya Persero or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciputra Development Tbk vs. Adhi Karya Persero
Performance |
| Timeline |
| Ciputra Development Tbk |
| Adhi Karya Persero |
Ciputra Development and Adhi Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciputra Development and Adhi Karya
The main advantage of trading using opposite Ciputra Development and Adhi Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciputra Development position performs unexpectedly, Adhi 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 Adhi Karya will offset losses from the drop in Adhi Karya's long position.| Ciputra Development vs. Summarecon Agung Tbk | Ciputra Development vs. Bumi Serpong Damai | Ciputra Development vs. Adhi Karya Persero | Ciputra Development vs. Wijaya Karya Beton |
| Adhi Karya vs. Wijaya Karya Beton | Adhi Karya vs. Waskita Karya Persero | Adhi Karya vs. Pembangunan Perumahan PT | Adhi Karya vs. Jasa Marga 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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