Correlation Between Citra Putra and PT Sunter

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

By analyzing existing cross correlation between Citra Putra Realty and PT Sunter Lakeside, you can compare the effects of market volatilities on Citra Putra and PT Sunter 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 Citra Putra with a short position of PT Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Putra and PT Sunter.

Diversification Opportunities for Citra Putra and PT Sunter

0.65

Correlation Coefficient

Citra Putra  PT Sunter

Poor diversification

The 3 months correlation between Citra and SNLK is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citra Putra Realty and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside and Citra Putra 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 Citra Putra Realty are associated (or correlated) with PT Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of Citra Putra i.e., Citra Putra and PT Sunter go up and down completely randomly.

Pair Corralation between Citra Putra and PT Sunter

Assuming the 90 days trading horizon Citra Putra Realty is expected to generate 1.07 times more return on investment than PT Sunter. However, Citra Putra is 1.07 times more volatile than PT Sunter Lakeside. It trades about 0.43 of its potential returns per unit of risk. PT Sunter Lakeside is currently generating about -0.06 per unit of risk. If you would invest  26,600  in Citra Putra Realty on December 29, 2024 and sell it today you would earn a total of  45,400  from holding Citra Putra Realty or generate 170.68% return on investment over 90 days.

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

Citra Putra Realty  vs.  PT Sunter Lakeside

Citra Putra Realty

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citra Putra Realty are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Citra Putra disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Sunter Lakeside

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sunter Lakeside 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 Citra Putra and PT Sunter

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

The idea behind Citra Putra Realty and PT Sunter Lakeside 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.