Correlation Between Siloam International and Citra Marga
Can any of the company-specific risk be diversified away by investing in both Siloam International and Citra Marga 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 Siloam International and Citra Marga into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siloam International Hospitals and Citra Marga Nusaphala, you can compare the effects of market volatilities on Siloam International and Citra Marga 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 Siloam International with a short position of Citra Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siloam International and Citra Marga.
Diversification Opportunities for Siloam International and Citra Marga
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siloam and Citra is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Siloam International Hospitals and Citra Marga Nusaphala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Marga Nusaphala and Siloam International 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 Siloam International Hospitals are associated (or correlated) with Citra Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Marga Nusaphala has no effect on the direction of Siloam International i.e., Siloam International and Citra Marga go up and down completely randomly.
Pair Corralation between Siloam International and Citra Marga
Assuming the 90 days trading horizon Siloam International Hospitals is expected to generate 1.85 times more return on investment than Citra Marga. However, Siloam International is 1.85 times more volatile than Citra Marga Nusaphala. It trades about 0.08 of its potential returns per unit of risk. Citra Marga Nusaphala is currently generating about -0.02 per unit of risk. If you would invest 125,597 in Siloam International Hospitals on August 26, 2024 and sell it today you would earn a total of 178,403 from holding Siloam International Hospitals or generate 142.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Siloam International Hospitals vs. Citra Marga Nusaphala
Performance |
| Timeline |
| Siloam International |
| Citra Marga Nusaphala |
Siloam International and Citra Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siloam International and Citra Marga
The main advantage of trading using opposite Siloam International and Citra Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siloam International position performs unexpectedly, Citra Marga 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 Marga will offset losses from the drop in Citra Marga's long position.| Siloam International vs. Astra Graphia Tbk | Siloam International vs. Hexindo Adiperkasa Tbk | Siloam International vs. Lautan Luas Tbk | Siloam International vs. Citra Marga Nusaphala |
| Citra Marga vs. Rukun Raharja Tbk | Citra Marga vs. PT Temas Tbk | Citra Marga vs. Weha Transportasi Indonesia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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