Correlation Between Citatah Tbk and PT Temas

Can any of the company-specific risk be diversified away by investing in both Citatah Tbk and PT Temas 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 Temas 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 Temas Tbk, you can compare the effects of market volatilities on Citatah Tbk and PT Temas 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 Temas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citatah Tbk and PT Temas.

Diversification Opportunities for Citatah Tbk and PT Temas

0.69

Correlation Coefficient

Citatah Tbk  PT Temas

Poor diversification

The 3 months correlation between Citatah and TMAS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk and PT Temas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Temas Tbk 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 Temas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Temas Tbk has no effect on the direction of Citatah Tbk i.e., Citatah Tbk and PT Temas go up and down completely randomly.

Pair Corralation between Citatah Tbk and PT Temas

Assuming the 90 days trading horizon Citatah Tbk is expected to under-perform the PT Temas. In addition to that, Citatah Tbk is 2.58 times more volatile than PT Temas Tbk. It trades about -0.06 of its total potential returns per unit of risk. PT Temas Tbk is currently generating about -0.09 per unit of volatility. If you would invest  14,900  in PT Temas Tbk on September 3, 2024 and sell it today you would lose (1,000.00) from holding PT Temas Tbk or give up 6.71% of portfolio value over 90 days.

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

Citatah Tbk  vs.  PT Temas Tbk

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 Temas Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Temas 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.

Pair Trading with Citatah Tbk and PT Temas

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

The idea behind Citatah Tbk and PT Temas Tbk 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.