Correlation Between Citatah Tbk and Cahayaputra Asa
Can any of the company-specific risk be diversified away by investing in both Citatah Tbk and Cahayaputra Asa 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 Citatah Tbk and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citatah Tbk and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Citatah Tbk and Cahayaputra Asa 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 Citatah Tbk with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citatah Tbk and Cahayaputra Asa.
Diversification Opportunities for Citatah Tbk and Cahayaputra Asa
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citatah and Cahayaputra is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Citatah Tbk 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 Citatah Tbk are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and Cahayaputra Asa go up and down completely randomly.
Pair Corralation between Citatah Tbk and Cahayaputra Asa
Assuming the 90 days trading horizon Citatah Tbk is expected to generate 0.89 times more return on investment than Cahayaputra Asa. However, Citatah Tbk is 1.12 times less risky than Cahayaputra Asa. It trades about 0.01 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about -0.03 per unit of risk. If you would invest 2,500 in Citatah Tbk on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Citatah Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citatah Tbk vs. Cahayaputra Asa Keramik
Performance |
| Timeline |
| Citatah Tbk |
| Cahayaputra Asa Keramik |
Citatah Tbk and Cahayaputra Asa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citatah Tbk and Cahayaputra Asa
The main advantage of trading using opposite Citatah Tbk and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citatah Tbk position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.| Citatah Tbk vs. Indonesian Tobacco Tbk | Citatah Tbk vs. PT Indofood Sukses | Citatah Tbk vs. Inocycle Technology Tbk | Citatah Tbk vs. Krakatau Steel Persero |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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