Correlation Between Saratoga Investama and Citra Borneo
Can any of the company-specific risk be diversified away by investing in both Saratoga Investama 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 Saratoga Investama and Citra Borneo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saratoga Investama Sedaya and Citra Borneo Utama, you can compare the effects of market volatilities on Saratoga Investama 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 Saratoga Investama with a short position of Citra Borneo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saratoga Investama and Citra Borneo.
Diversification Opportunities for Saratoga Investama and Citra Borneo
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saratoga and Citra is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investama Sedaya 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 Saratoga Investama 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 Saratoga Investama Sedaya 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 Saratoga Investama i.e., Saratoga Investama and Citra Borneo go up and down completely randomly.
Pair Corralation between Saratoga Investama and Citra Borneo
Assuming the 90 days trading horizon Saratoga Investama Sedaya is expected to generate 0.63 times more return on investment than Citra Borneo. However, Saratoga Investama Sedaya is 1.58 times less risky than Citra Borneo. It trades about 0.05 of its potential returns per unit of risk. Citra Borneo Utama is currently generating about -0.01 per unit of risk. If you would invest 152,734 in Saratoga Investama Sedaya on August 27, 2024 and sell it today you would earn a total of 66,266 from holding Saratoga Investama Sedaya or generate 43.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saratoga Investama Sedaya vs. Citra Borneo Utama
Performance |
| Timeline |
| Saratoga Investama Sedaya |
| Citra Borneo Utama |
Saratoga Investama and Citra Borneo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saratoga Investama and Citra Borneo
The main advantage of trading using opposite Saratoga Investama and Citra Borneo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saratoga Investama 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.| Saratoga Investama vs. Elang Mahkota Teknologi | Saratoga Investama vs. Mitra Pinasthika Mustika | Saratoga Investama vs. Tower Bersama Infrastructure | Saratoga Investama vs. Merdeka Copper Gold |
| Citra Borneo vs. Dharma Satya Nusantara | Citra Borneo vs. Saratoga Investama Sedaya | Citra Borneo vs. Surya Esa Perkasa | Citra Borneo vs. Elang Mahkota Teknologi |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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