Correlation Between Putra Rajawali and Citra Borneo
Can any of the company-specific risk be diversified away by investing in both Putra Rajawali and Citra Borneo 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 Putra Rajawali and Citra Borneo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putra Rajawali Kencana and Citra Borneo Utama, you can compare the effects of market volatilities on Putra Rajawali and Citra Borneo 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 Putra Rajawali with a short position of Citra Borneo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putra Rajawali and Citra Borneo.
Diversification Opportunities for Putra Rajawali and Citra Borneo
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putra and Citra is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Putra Rajawali Kencana and Citra Borneo Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Borneo Utama and Putra Rajawali 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 Putra Rajawali Kencana are associated (or correlated) with Citra Borneo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Borneo Utama has no effect on the direction of Putra Rajawali i.e., Putra Rajawali and Citra Borneo go up and down completely randomly.
Pair Corralation between Putra Rajawali and Citra Borneo
Assuming the 90 days trading horizon Putra Rajawali Kencana is expected to generate 1.99 times more return on investment than Citra Borneo. However, Putra Rajawali is 1.99 times more volatile than Citra Borneo Utama. It trades about 0.26 of its potential returns per unit of risk. Citra Borneo Utama is currently generating about 0.34 per unit of risk. If you would invest 1,100 in Putra Rajawali Kencana on October 24, 2024 and sell it today you would earn a total of 300.00 from holding Putra Rajawali Kencana or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Putra Rajawali Kencana vs. Citra Borneo Utama
Performance |
| Timeline |
| Putra Rajawali Kencana |
| Citra Borneo Utama |
Putra Rajawali and Citra Borneo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putra Rajawali and Citra Borneo
The main advantage of trading using opposite Putra Rajawali and Citra Borneo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putra Rajawali position performs unexpectedly, Citra Borneo 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 Citra Borneo will offset losses from the drop in Citra Borneo's long position.| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi Tbk |
| Citra Borneo vs. PT Bank Bisnis | Citra Borneo vs. Gunawan Dianjaya Steel | Citra Borneo vs. PT Wahana Interfood | Citra Borneo vs. PT Data Sinergitama |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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