Correlation Between Ciputra Development and Kawasan Industri
Can any of the company-specific risk be diversified away by investing in both Ciputra Development and Kawasan Industri 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 Kawasan Industri 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 Kawasan Industri Jababeka, you can compare the effects of market volatilities on Ciputra Development and Kawasan Industri 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 Kawasan Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciputra Development and Kawasan Industri.
Diversification Opportunities for Ciputra Development and Kawasan Industri
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ciputra and Kawasan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ciputra Development Tbk and Kawasan Industri Jababeka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasan Industri Jababeka 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 Kawasan Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasan Industri Jababeka has no effect on the direction of Ciputra Development i.e., Ciputra Development and Kawasan Industri go up and down completely randomly.
Pair Corralation between Ciputra Development and Kawasan Industri
Assuming the 90 days trading horizon Ciputra Development is expected to generate 1.11 times less return on investment than Kawasan Industri. In addition to that, Ciputra Development is 2.25 times more volatile than Kawasan Industri Jababeka. It trades about 0.04 of its total potential returns per unit of risk. Kawasan Industri Jababeka is currently generating about 0.11 per unit of volatility. If you would invest 18,800 in Kawasan Industri Jababeka on October 23, 2024 and sell it today you would earn a total of 400.00 from holding Kawasan Industri Jababeka or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Ciputra Development Tbk vs. Kawasan Industri Jababeka
Performance |
| Timeline |
| Ciputra Development Tbk |
| Kawasan Industri Jababeka |
Ciputra Development and Kawasan Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciputra Development and Kawasan Industri
The main advantage of trading using opposite Ciputra Development and Kawasan Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciputra Development position performs unexpectedly, Kawasan Industri 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 Kawasan Industri will offset losses from the drop in Kawasan Industri's long position.| Ciputra Development vs. Bumi Serpong Damai | Ciputra Development vs. Adhi Karya Persero | Ciputra Development vs. Wijaya Karya Beton | Ciputra Development vs. Pakuwon Jati Tbk |
| Kawasan Industri vs. Bakrieland Development Tbk | Kawasan Industri vs. Ciputra Development Tbk | Kawasan Industri vs. Sentul City Tbk | Kawasan Industri vs. Solusi Bangun Indonesia |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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