Correlation Between City Retail and Siloam International
Can any of the company-specific risk be diversified away by investing in both City Retail and Siloam International 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 Siloam International 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 Siloam International Hospitals, you can compare the effects of market volatilities on City Retail and Siloam International 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 Siloam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Siloam International.
Diversification Opportunities for City Retail and Siloam International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between City and Siloam is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments and Siloam International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siloam International 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 Siloam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siloam International has no effect on the direction of City Retail i.e., City Retail and Siloam International go up and down completely randomly.
Pair Corralation between City Retail and Siloam International
Assuming the 90 days trading horizon City Retail Developments is expected to under-perform the Siloam International. But the stock apears to be less risky and, when comparing its historical volatility, City Retail Developments is 5.29 times less risky than Siloam International. The stock trades about -0.07 of its potential returns per unit of risk. The Siloam International Hospitals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 254,984 in Siloam International Hospitals on November 28, 2024 and sell it today you would earn a total of 33,016 from holding Siloam International Hospitals or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Retail Developments vs. Siloam International Hospitals
Performance |
| Timeline |
| City Retail Developments |
| Siloam International |
City Retail and Siloam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Siloam International
The main advantage of trading using opposite City Retail and Siloam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail position performs unexpectedly, Siloam International 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 Siloam International will offset losses from the drop in Siloam International'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 |
| Siloam International vs. Mitra Keluarga Karyasehat | Siloam International vs. Matahari Department Store | Siloam International vs. Surya Citra Media | Siloam International vs. Sawit Sumbermas Sarana |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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