Correlation Between Kedaung Indah and Citatah Tbk

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Can any of the company-specific risk be diversified away by investing in both Kedaung Indah 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 Kedaung Indah and Citatah Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedaung Indah Can and Citatah Tbk, you can compare the effects of market volatilities on Kedaung Indah 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 Kedaung Indah with a short position of Citatah Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedaung Indah and Citatah Tbk.

Diversification Opportunities for Kedaung Indah and Citatah Tbk

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Kedaung and Citatah is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kedaung Indah Can and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Kedaung Indah 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 Kedaung Indah Can 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 Kedaung Indah i.e., Kedaung Indah and Citatah Tbk go up and down completely randomly.

Pair Corralation between Kedaung Indah and Citatah Tbk

Assuming the 90 days trading horizon Kedaung Indah Can is expected to under-perform the Citatah Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Kedaung Indah Can is 1.64 times less risky than Citatah Tbk. The stock trades about -0.11 of its potential returns per unit of risk. The Citatah Tbk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,600  in Citatah Tbk on October 22, 2024 and sell it today you would earn a total of  100.00  from holding Citatah Tbk or generate 3.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kedaung Indah Can  vs.  Citatah Tbk

 Performance 
       Timeline  
Kedaung Indah Can 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kedaung Indah Can has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Citatah Tbk 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Citatah Tbk are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Citatah Tbk disclosed solid returns over the last few months and may actually be approaching a breakup point.

Kedaung Indah and Citatah Tbk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kedaung Indah and Citatah Tbk

The main advantage of trading using opposite Kedaung Indah and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedaung Indah 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.
The idea behind Kedaung Indah Can and Citatah Tbk 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.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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