Correlation Between Krakatau Steel and Citatah Tbk
Can any of the company-specific risk be diversified away by investing in both Krakatau Steel 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 Krakatau Steel and Citatah Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krakatau Steel Persero and Citatah Tbk, you can compare the effects of market volatilities on Krakatau Steel 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 Krakatau Steel with a short position of Citatah Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krakatau Steel and Citatah Tbk.
Diversification Opportunities for Krakatau Steel and Citatah Tbk
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Krakatau and Citatah is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Krakatau Steel Persero and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Krakatau Steel 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 Krakatau Steel Persero 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 Krakatau Steel i.e., Krakatau Steel and Citatah Tbk go up and down completely randomly.
Pair Corralation between Krakatau Steel and Citatah Tbk
Assuming the 90 days trading horizon Krakatau Steel is expected to generate 5.4 times less return on investment than Citatah Tbk. In addition to that, Krakatau Steel is 1.03 times more volatile than Citatah Tbk. It trades about 0.02 of its total potential returns per unit of risk. Citatah Tbk is currently generating about 0.14 per unit of volatility. If you would invest 1,400 in Citatah Tbk on September 2, 2024 and sell it today you would earn a total of 1,100 from holding Citatah Tbk or generate 78.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Krakatau Steel Persero vs. Citatah Tbk
Performance |
| Timeline |
| Krakatau Steel Persero |
| Citatah Tbk |
Krakatau Steel and Citatah Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krakatau Steel and Citatah Tbk
The main advantage of trading using opposite Krakatau Steel and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krakatau Steel 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.| Krakatau Steel vs. Perusahaan Gas Negara | Krakatau Steel vs. Telkom Indonesia Tbk | Krakatau Steel vs. Mitra Pinasthika Mustika | Krakatau Steel vs. Jakarta Int Hotels |
| Citatah Tbk vs. PT Charlie Hospital | Citatah Tbk vs. Diamond Food Indonesia | Citatah Tbk vs. Siloam International Hospitals | Citatah Tbk vs. FKS Food Sejahtera |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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