Correlation Between Citatah Tbk and Berkah Beton

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

By analyzing existing cross correlation between Citatah Tbk and Berkah Beton Sadaya, you can compare the effects of market volatilities on Citatah Tbk and Berkah Beton 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 Berkah Beton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citatah Tbk and Berkah Beton.

Diversification Opportunities for Citatah Tbk and Berkah Beton

0.31

Correlation Coefficient

Citatah Tbk  Berkah Beton

Weak diversification

The 3 months correlation between Citatah and Berkah is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and Berkah Beton Sadaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Beton Sadaya 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 Berkah Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Beton Sadaya has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and Berkah Beton go up and down completely randomly.

Pair Corralation between Citatah Tbk and Berkah Beton

Assuming the 90 days trading horizon Citatah Tbk is expected to under-perform the Berkah Beton. But the stock apears to be less risky and, when comparing its historical volatility, Citatah Tbk is 4.8 times less risky than Berkah Beton. The stock trades about -0.23 of its potential returns per unit of risk. The Berkah Beton Sadaya is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  600.00  in Berkah Beton Sadaya on December 1, 2024 and sell it today you would lose (100.00) from holding Berkah Beton Sadaya or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Citatah Tbk  vs.  Berkah Beton Sadaya

Citatah Tbk

Risk-Adjusted Performance

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.

Berkah Beton Sadaya

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkah Beton Sadaya are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Berkah Beton disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citatah Tbk and Berkah Beton

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

The idea behind Citatah Tbk and Berkah Beton Sadaya 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..