Correlation Between City Retail and Humpuss Intermoda
Can any of the company-specific risk be diversified away by investing in both City Retail and Humpuss Intermoda 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 City Retail and Humpuss Intermoda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Retail Developments and Humpuss Intermoda Transportasi, you can compare the effects of market volatilities on City Retail and Humpuss Intermoda 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 City Retail with a short position of Humpuss Intermoda. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Humpuss Intermoda.
Diversification Opportunities for City Retail and Humpuss Intermoda
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between City and Humpuss is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments and Humpuss Intermoda Transportasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humpuss Intermoda and City Retail 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 City Retail Developments are associated (or correlated) with Humpuss Intermoda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humpuss Intermoda has no effect on the direction of City Retail i.e., City Retail and Humpuss Intermoda go up and down completely randomly.
Pair Corralation between City Retail and Humpuss Intermoda
Assuming the 90 days trading horizon City Retail is expected to generate 323.27 times less return on investment than Humpuss Intermoda. But when comparing it to its historical volatility, City Retail Developments is 5.71 times less risky than Humpuss Intermoda. It trades about 0.0 of its potential returns per unit of risk. Humpuss Intermoda Transportasi is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 30,000 in Humpuss Intermoda Transportasi on August 30, 2024 and sell it today you would earn a total of 11,600 from holding Humpuss Intermoda Transportasi or generate 38.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Retail Developments vs. Humpuss Intermoda Transportasi
Performance |
| Timeline |
| City Retail Developments |
| Humpuss Intermoda |
City Retail and Humpuss Intermoda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Humpuss Intermoda
The main advantage of trading using opposite City Retail and Humpuss Intermoda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail position performs unexpectedly, Humpuss Intermoda 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 Humpuss Intermoda will offset losses from the drop in Humpuss Intermoda's long position.| City Retail vs. Metropolitan Land Tbk | City Retail vs. Bekasi Fajar Industrial | City Retail vs. Greenwood Sejahtera Tbk | City Retail vs. Metropolitan Kentjana Tbk |
| Humpuss Intermoda vs. PT MNC Energy | Humpuss Intermoda vs. Tanah Laut Tbk | Humpuss Intermoda vs. Indorama Synthetics Tbk | Humpuss Intermoda vs. Fortune Mate 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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