Correlation Between City Retail and Sanurhasta Mitra
Can any of the company-specific risk be diversified away by investing in both City Retail and Sanurhasta Mitra 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 Sanurhasta Mitra 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 Sanurhasta Mitra PT, you can compare the effects of market volatilities on City Retail and Sanurhasta Mitra 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 Sanurhasta Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Sanurhasta Mitra.
Diversification Opportunities for City Retail and Sanurhasta Mitra
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Sanurhasta is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments and Sanurhasta Mitra PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanurhasta Mitra 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 Sanurhasta Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanurhasta Mitra has no effect on the direction of City Retail i.e., City Retail and Sanurhasta Mitra go up and down completely randomly.
Pair Corralation between City Retail and Sanurhasta Mitra
Assuming the 90 days trading horizon City Retail Developments is expected to under-perform the Sanurhasta Mitra. But the stock apears to be less risky and, when comparing its historical volatility, City Retail Developments is 5.56 times less risky than Sanurhasta Mitra. The stock trades about -0.17 of its potential returns per unit of risk. The Sanurhasta Mitra PT is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Sanurhasta Mitra PT on September 1, 2024 and sell it today you would earn a total of 1,100 from holding Sanurhasta Mitra PT or generate 47.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
City Retail Developments vs. Sanurhasta Mitra PT
Performance |
| Timeline |
| City Retail Developments |
| Sanurhasta Mitra |
City Retail and Sanurhasta Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Sanurhasta Mitra
The main advantage of trading using opposite City Retail and Sanurhasta Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail position performs unexpectedly, Sanurhasta Mitra 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 Sanurhasta Mitra will offset losses from the drop in Sanurhasta Mitra's long position.| City Retail vs. Lippo Cikarang Tbk | City Retail vs. Lippo Karawaci Tbk | City Retail vs. Mitra Pinasthika Mustika | City Retail vs. Jakarta Int Hotels |
| Sanurhasta Mitra vs. Lippo Cikarang Tbk | Sanurhasta Mitra vs. Lippo Karawaci Tbk | Sanurhasta Mitra vs. Mitra Pinasthika Mustika | Sanurhasta Mitra vs. Jakarta Int Hotels |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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