Correlation Between Citatah Tbk and PT Multi

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

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

Diversification Opportunities for Citatah Tbk and PT Multi

-0.14

Correlation Coefficient

Citatah Tbk  PT Multi

Good diversification

The 3 months correlation between Citatah and FOLK is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and PT Multi Garam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Multi Garam 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 PT Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Multi Garam has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and PT Multi go up and down completely randomly.

Pair Corralation between Citatah Tbk and PT Multi

Assuming the 90 days trading horizon Citatah Tbk is expected to under-perform the PT Multi. But the stock apears to be less risky and, when comparing its historical volatility, Citatah Tbk is 1.78 times less risky than PT Multi. The stock trades about -0.07 of its potential returns per unit of risk. The PT Multi Garam is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,300  in PT Multi Garam on September 13, 2024 and sell it today you would lose (300.00) from holding PT Multi Garam or give up 5.66% 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.  PT Multi Garam

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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PT Multi Garam

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Multi Garam has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Multi 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 PT Multi

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

The idea behind Citatah Tbk and PT Multi Garam 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.