Correlation Between Citatah Tbk and Akasha Wira

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

By analyzing existing cross correlation between Citatah Tbk and Akasha Wira International, you can compare the effects of market volatilities on Citatah Tbk and Akasha Wira 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 Citatah Tbk with a short position of Akasha Wira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citatah Tbk and Akasha Wira.

Diversification Opportunities for Citatah Tbk and Akasha Wira

-0.36

Correlation Coefficient

Citatah Tbk  Akasha Wira

Very good diversification

The 3 months correlation between Citatah and Akasha is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and Akasha Wira International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akasha Wira International and Citatah Tbk 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 Citatah Tbk are associated (or correlated) with Akasha Wira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akasha Wira International has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and Akasha Wira go up and down completely randomly.

Pair Corralation between Citatah Tbk and Akasha Wira

Assuming the 90 days trading horizon Citatah Tbk is expected to under-perform the Akasha Wira. In addition to that, Citatah Tbk is 1.68 times more volatile than Akasha Wira International. It trades about -0.02 of its total potential returns per unit of risk. Akasha Wira International is currently generating about -0.01 per unit of volatility. If you would invest  982,500  in Akasha Wira International on August 30, 2024 and sell it today you would lose (17,500) from holding Akasha Wira International or give up 1.78% of portfolio value over 90 days.

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

Citatah Tbk  vs.  Akasha Wira International

Citatah Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Akasha Wira International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akasha Wira International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Akasha Wira 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 Citatah Tbk and Akasha Wira

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

The idea behind Citatah Tbk and Akasha Wira International 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.