Correlation Between GM and Citra Putra
Can any of the company-specific risk be diversified away by investing in both GM and Citra Putra 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 GM and Citra Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Citra Putra Realty, you can compare the effects of market volatilities on GM and Citra Putra 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 GM with a short position of Citra Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Citra Putra.
Diversification Opportunities for GM and Citra Putra
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Citra is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Citra Putra Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Putra Realty and GM 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 General Motors are associated (or correlated) with Citra Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Putra Realty has no effect on the direction of GM i.e., GM and Citra Putra go up and down completely randomly.
Pair Corralation between GM and Citra Putra
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.52 times more return on investment than Citra Putra. However, General Motors is 1.94 times less risky than Citra Putra. It trades about 0.07 of its potential returns per unit of risk. Citra Putra Realty is currently generating about 0.01 per unit of risk. If you would invest 3,536 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,023 from holding General Motors or generate 57.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.72% |
| Values | Daily Returns |
General Motors vs. Citra Putra Realty
Performance |
| Timeline |
| General Motors |
| Citra Putra Realty |
GM and Citra Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Citra Putra
The main advantage of trading using opposite GM and Citra Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Citra Putra 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 Citra Putra will offset losses from the drop in Citra Putra's long position.The idea behind General Motors and Citra Putra Realty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Citra Putra vs. Jasa Armada Indonesia | Citra Putra vs. Cahayaputra Asa Keramik | Citra Putra vs. Campina Ice Cream | Citra Putra vs. Integra Indocabinet 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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