Correlation Between Tera Data and Cipta Selera

Can any of the company-specific risk be diversified away by investing in both Tera Data and Cipta Selera 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 Tera Data and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tera Data Indonusa and Cipta Selera Murni, you can compare the effects of market volatilities on Tera Data and Cipta Selera 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 Tera Data with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tera Data and Cipta Selera.

Diversification Opportunities for Tera Data and Cipta Selera

0.54

Correlation Coefficient

Tera Data  Cipta Selera

Very weak diversification

The 3 months correlation between Tera and Cipta is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tera Data Indonusa and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and Tera Data 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 Tera Data Indonusa are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Tera Data i.e., Tera Data and Cipta Selera go up and down completely randomly.

Pair Corralation between Tera Data and Cipta Selera

Assuming the 90 days trading horizon Tera Data Indonusa is expected to generate 0.45 times more return on investment than Cipta Selera. However, Tera Data Indonusa is 2.23 times less risky than Cipta Selera. It trades about -0.08 of its potential returns per unit of risk. Cipta Selera Murni is currently generating about -0.08 per unit of risk. If you would invest  12,200  in Tera Data Indonusa on December 20, 2024 and sell it today you would lose (1,200) from holding Tera Data Indonusa or give up 9.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tera Data Indonusa  vs.  Cipta Selera Murni

Tera Data Indonusa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tera Data Indonusa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Cipta Selera Murni

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cipta Selera Murni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Tera Data and Cipta Selera

The main advantage of trading using opposite Tera Data and Cipta Selera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tera Data position performs unexpectedly, Cipta Selera 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 Cipta Selera will offset losses from the drop in Cipta Selera's long position.

The idea behind Tera Data Indonusa and Cipta Selera Murni pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.