Correlation Between Ciputra Development and Global Mediacom
Can any of the company-specific risk be diversified away by investing in both Ciputra Development and Global Mediacom 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 Global Mediacom 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 Global Mediacom Tbk, you can compare the effects of market volatilities on Ciputra Development and Global Mediacom 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 Global Mediacom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciputra Development and Global Mediacom.
Diversification Opportunities for Ciputra Development and Global Mediacom
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ciputra and Global is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ciputra Development Tbk and Global Mediacom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Mediacom Tbk 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 Global Mediacom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Mediacom Tbk has no effect on the direction of Ciputra Development i.e., Ciputra Development and Global Mediacom go up and down completely randomly.
Pair Corralation between Ciputra Development and Global Mediacom
Assuming the 90 days trading horizon Ciputra Development Tbk is expected to generate 1.02 times more return on investment than Global Mediacom. However, Ciputra Development is 1.02 times more volatile than Global Mediacom Tbk. It trades about 0.02 of its potential returns per unit of risk. Global Mediacom Tbk is currently generating about -0.03 per unit of risk. If you would invest 97,227 in Ciputra Development Tbk on August 25, 2024 and sell it today you would earn a total of 9,773 from holding Ciputra Development Tbk or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciputra Development Tbk vs. Global Mediacom Tbk
Performance |
| Timeline |
| Ciputra Development Tbk |
| Global Mediacom Tbk |
Ciputra Development and Global Mediacom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciputra Development and Global Mediacom
The main advantage of trading using opposite Ciputra Development and Global Mediacom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciputra Development position performs unexpectedly, Global Mediacom 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 Global Mediacom will offset losses from the drop in Global Mediacom'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 |
| Global Mediacom vs. Media Nusantara Citra | Global Mediacom vs. Mnc Investama Tbk | Global Mediacom vs. Akr Corporindo Tbk | Global Mediacom vs. Ciputra Development 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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