Correlation Between Cikarang Listrindo and Prima Globalindo
Can any of the company-specific risk be diversified away by investing in both Cikarang Listrindo and Prima Globalindo 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 Cikarang Listrindo and Prima Globalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cikarang Listrindo Tbk and Prima Globalindo Logistik, you can compare the effects of market volatilities on Cikarang Listrindo and Prima Globalindo 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 Cikarang Listrindo with a short position of Prima Globalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cikarang Listrindo and Prima Globalindo.
Diversification Opportunities for Cikarang Listrindo and Prima Globalindo
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cikarang and Prima is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cikarang Listrindo Tbk and Prima Globalindo Logistik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Globalindo Logistik and Cikarang Listrindo 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 Cikarang Listrindo Tbk are associated (or correlated) with Prima Globalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Globalindo Logistik has no effect on the direction of Cikarang Listrindo i.e., Cikarang Listrindo and Prima Globalindo go up and down completely randomly.
Pair Corralation between Cikarang Listrindo and Prima Globalindo
Assuming the 90 days trading horizon Cikarang Listrindo Tbk is expected to generate 0.58 times more return on investment than Prima Globalindo. However, Cikarang Listrindo Tbk is 1.71 times less risky than Prima Globalindo. It trades about 0.06 of its potential returns per unit of risk. Prima Globalindo Logistik is currently generating about 0.0 per unit of risk. If you would invest 56,077 in Cikarang Listrindo Tbk on September 5, 2024 and sell it today you would earn a total of 14,423 from holding Cikarang Listrindo Tbk or generate 25.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cikarang Listrindo Tbk vs. Prima Globalindo Logistik
Performance |
| Timeline |
| Cikarang Listrindo Tbk |
| Prima Globalindo Logistik |
Cikarang Listrindo and Prima Globalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cikarang Listrindo and Prima Globalindo
The main advantage of trading using opposite Cikarang Listrindo and Prima Globalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cikarang Listrindo position performs unexpectedly, Prima Globalindo 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 Prima Globalindo will offset losses from the drop in Prima Globalindo's long position.| Cikarang Listrindo vs. Aneka Tambang Persero | Cikarang Listrindo vs. Bukit Asam Tbk | Cikarang Listrindo vs. Telkom Indonesia Tbk | Cikarang Listrindo vs. Astra International Tbk |
| Prima Globalindo vs. Jasa Armada Indonesia | Prima Globalindo vs. Cikarang Listrindo Tbk | Prima Globalindo vs. Mitra Pinasthika Mustika | Prima Globalindo vs. Wijaya Karya Bangunan |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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