Correlation Between Indointernet Tbk and Citatah Tbk
Can any of the company-specific risk be diversified away by investing in both Indointernet Tbk and Citatah Tbk 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 Indointernet Tbk and Citatah Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indointernet Tbk PT and Citatah Tbk, you can compare the effects of market volatilities on Indointernet Tbk and Citatah Tbk 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 Indointernet Tbk with a short position of Citatah Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indointernet Tbk and Citatah Tbk.
Diversification Opportunities for Indointernet Tbk and Citatah Tbk
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indointernet and Citatah is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Indointernet Tbk PT and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Indointernet 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 Indointernet Tbk PT are associated (or correlated) with Citatah Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citatah Tbk has no effect on the direction of Indointernet Tbk i.e., Indointernet Tbk and Citatah Tbk go up and down completely randomly.
Pair Corralation between Indointernet Tbk and Citatah Tbk
Assuming the 90 days trading horizon Indointernet Tbk PT is expected to under-perform the Citatah Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Indointernet Tbk PT is 1.56 times less risky than Citatah Tbk. The stock trades about -0.04 of its potential returns per unit of risk. The Citatah Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Citatah Tbk on September 13, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indointernet Tbk PT vs. Citatah Tbk
Performance |
| Timeline |
| Indointernet Tbk |
| Citatah Tbk |
Indointernet Tbk and Citatah Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indointernet Tbk and Citatah Tbk
The main advantage of trading using opposite Indointernet Tbk and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indointernet Tbk position performs unexpectedly, Citatah Tbk 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 Citatah Tbk will offset losses from the drop in Citatah Tbk's long position.| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net Indonesia |
| Citatah Tbk vs. Siloam International Hospitals | Citatah Tbk vs. Weha Transportasi Indonesia | Citatah Tbk vs. Diamond Food Indonesia | Citatah Tbk vs. Metro Healthcare 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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