Correlation Between City Retail and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both City Retail and Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama Tbk, you can compare the effects of market volatilities on City Retail and Indo Acidatama 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 Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Indo Acidatama.
Diversification Opportunities for City Retail and Indo Acidatama
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between City and Indo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama Tbk 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 Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of City Retail i.e., City Retail and Indo Acidatama go up and down completely randomly.
Pair Corralation between City Retail and Indo Acidatama
Assuming the 90 days trading horizon City Retail Developments is expected to under-perform the Indo Acidatama. But the stock apears to be less risky and, when comparing its historical volatility, City Retail Developments is 2.6 times less risky than Indo Acidatama. The stock trades about -0.02 of its potential returns per unit of risk. The Indo Acidatama Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,804 in Indo Acidatama Tbk on November 5, 2024 and sell it today you would earn a total of 196.00 from holding Indo Acidatama Tbk or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
City Retail Developments vs. Indo Acidatama Tbk
Performance |
| Timeline |
| City Retail Developments |
| Indo Acidatama Tbk |
City Retail and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Indo Acidatama
The main advantage of trading using opposite City Retail and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama'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 |
| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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