Correlation Between Unilever Indonesia and Cita Mineral
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Cita Mineral 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 Unilever Indonesia and Cita Mineral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Cita Mineral Investindo, you can compare the effects of market volatilities on Unilever Indonesia and Cita Mineral 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 Unilever Indonesia with a short position of Cita Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Cita Mineral.
Diversification Opportunities for Unilever Indonesia and Cita Mineral
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Unilever and Cita is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Cita Mineral Investindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cita Mineral Investindo and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Cita Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cita Mineral Investindo has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Cita Mineral go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Cita Mineral
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Cita Mineral. But the stock apears to be less risky and, when comparing its historical volatility, Unilever Indonesia Tbk is 2.01 times less risky than Cita Mineral. The stock trades about -0.08 of its potential returns per unit of risk. The Cita Mineral Investindo is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 263,000 in Cita Mineral Investindo on September 1, 2024 and sell it today you would earn a total of 82,000 from holding Cita Mineral Investindo or generate 31.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Cita Mineral Investindo
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Cita Mineral Investindo |
Unilever Indonesia and Cita Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Cita Mineral
The main advantage of trading using opposite Unilever Indonesia and Cita Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Cita Mineral 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 Cita Mineral will offset losses from the drop in Cita Mineral's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Cita Mineral vs. Citatah Tbk | Cita Mineral vs. Indo Kordsa Tbk | Cita Mineral vs. Central Omega Resources | Cita Mineral vs. Betonjaya Manunggal 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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