Correlation Between Cita Mineral and Ifishdeco

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

By analyzing existing cross correlation between Cita Mineral Investindo and Ifishdeco PT, you can compare the effects of market volatilities on Cita Mineral and Ifishdeco 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 Cita Mineral with a short position of Ifishdeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cita Mineral and Ifishdeco.

Diversification Opportunities for Cita Mineral and Ifishdeco

0.47

Correlation Coefficient

Cita Mineral  Ifishdeco

Very weak diversification

The 3 months correlation between Cita and Ifishdeco is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cita Mineral Investindo and Ifishdeco PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ifishdeco PT and Cita Mineral 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 Cita Mineral Investindo are associated (or correlated) with Ifishdeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ifishdeco PT has no effect on the direction of Cita Mineral i.e., Cita Mineral and Ifishdeco go up and down completely randomly.

Pair Corralation between Cita Mineral and Ifishdeco

Assuming the 90 days trading horizon Cita Mineral Investindo is expected to under-perform the Ifishdeco. But the stock apears to be less risky and, when comparing its historical volatility, Cita Mineral Investindo is 3.1 times less risky than Ifishdeco. The stock trades about -0.19 of its potential returns per unit of risk. The Ifishdeco PT is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  83,000  in Ifishdeco PT on December 30, 2024 and sell it today you would lose (11,000) from holding Ifishdeco PT or give up 13.25% of portfolio value over 90 days.

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

Cita Mineral Investindo  vs.  Ifishdeco PT

Cita Mineral Investindo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cita Mineral Investindo 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.

Ifishdeco PT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ifishdeco PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ifishdeco is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cita Mineral and Ifishdeco

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

The idea behind Cita Mineral Investindo and Ifishdeco PT 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.