Correlation Between Citra Marga and Asuransi Harta

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

By analyzing existing cross correlation between Citra Marga Nusaphala and Asuransi Harta Aman, you can compare the effects of market volatilities on Citra Marga and Asuransi Harta 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 Marga with a short position of Asuransi Harta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Asuransi Harta.

Diversification Opportunities for Citra Marga and Asuransi Harta

0.48

Correlation Coefficient

Citra Marga  Asuransi Harta

Very weak diversification

The 3 months correlation between Citra and Asuransi is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Asuransi Harta Aman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Harta Aman and Citra Marga 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 Marga Nusaphala are associated (or correlated) with Asuransi Harta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Harta Aman has no effect on the direction of Citra Marga i.e., Citra Marga and Asuransi Harta go up and down completely randomly.

Pair Corralation between Citra Marga and Asuransi Harta

Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to generate 3.06 times more return on investment than Asuransi Harta. However, Citra Marga is 3.06 times more volatile than Asuransi Harta Aman. It trades about 0.05 of its potential returns per unit of risk. Asuransi Harta Aman is currently generating about -0.15 per unit of risk. If you would invest  143,000  in Citra Marga Nusaphala on December 30, 2024 and sell it today you would earn a total of  12,500  from holding Citra Marga Nusaphala or generate 8.74% return on investment over 90 days.

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

Citra Marga Nusaphala  vs.  Asuransi Harta Aman

Citra Marga Nusaphala

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citra Marga Nusaphala are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Citra Marga disclosed solid returns over the last few months and may actually be approaching a breakup point.

Asuransi Harta Aman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asuransi Harta Aman 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 Marga and Asuransi Harta

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

The idea behind Citra Marga Nusaphala and Asuransi Harta Aman 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.