Correlation Between Diamond Citra and Karya Bersama

Can any of the company-specific risk be diversified away by investing in both Diamond Citra and Karya Bersama 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 Diamond Citra and Karya Bersama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Diamond Citra Propertindo and Karya Bersama Anugerah, you can compare the effects of market volatilities on Diamond Citra and Karya Bersama 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 Diamond Citra with a short position of Karya Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Citra and Karya Bersama.

Diversification Opportunities for Diamond Citra and Karya Bersama

0.45

Correlation Coefficient

Diamond Citra  Karya Bersama

Very weak diversification

The 3 months correlation between Diamond and Karya is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Citra Propertindo and Karya Bersama Anugerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karya Bersama Anugerah and Diamond Citra 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 Diamond Citra Propertindo are associated (or correlated) with Karya Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karya Bersama Anugerah has no effect on the direction of Diamond Citra i.e., Diamond Citra and Karya Bersama go up and down completely randomly.

Pair Corralation between Diamond Citra and Karya Bersama

Assuming the 90 days trading horizon Diamond Citra Propertindo is expected to generate 1.93 times more return on investment than Karya Bersama. However, Diamond Citra is 1.93 times more volatile than Karya Bersama Anugerah. It trades about 0.06 of its potential returns per unit of risk. Karya Bersama Anugerah is currently generating about -0.02 per unit of risk. If you would invest  800.00  in Diamond Citra Propertindo on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Diamond Citra Propertindo or generate 12.5% return on investment over 90 days.

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

Diamond Citra Propertindo  vs.  Karya Bersama Anugerah

Diamond Citra Propertindo

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Diamond Citra Propertindo are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Diamond Citra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Karya Bersama Anugerah

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karya Bersama Anugerah has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Karya Bersama 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 Diamond Citra and Karya Bersama

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

The idea behind Diamond Citra Propertindo and Karya Bersama Anugerah 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.