Correlation Between Citatah Tbk and Royalindo Investa

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

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

Diversification Opportunities for Citatah Tbk and Royalindo Investa

0.21

Correlation Coefficient

Citatah Tbk  Royalindo Investa

Modest diversification

The 3 months correlation between Citatah and Royalindo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and Royalindo Investa Wijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalindo Investa Wijaya 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 Royalindo Investa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalindo Investa Wijaya has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and Royalindo Investa go up and down completely randomly.

Pair Corralation between Citatah Tbk and Royalindo Investa

Assuming the 90 days trading horizon Citatah Tbk is expected to under-perform the Royalindo Investa. In addition to that, Citatah Tbk is 1.85 times more volatile than Royalindo Investa Wijaya. It trades about -0.07 of its total potential returns per unit of risk. Royalindo Investa Wijaya is currently generating about 0.01 per unit of volatility. If you would invest  11,100  in Royalindo Investa Wijaya on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Royalindo Investa Wijaya or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Citatah Tbk  vs.  Royalindo Investa Wijaya

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.

Royalindo Investa Wijaya

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Citatah Tbk and Royalindo Investa Wijaya 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.