Correlation Between Duta Pertiwi and PT Citra

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

By analyzing existing cross correlation between Duta Pertiwi Nusantara and PT Citra Tubindo, you can compare the effects of market volatilities on Duta Pertiwi and PT Citra 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 Duta Pertiwi with a short position of PT Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duta Pertiwi and PT Citra.

Diversification Opportunities for Duta Pertiwi and PT Citra

0.71

Correlation Coefficient

Duta Pertiwi  PT Citra

Poor diversification

The 3 months correlation between Duta and CTBN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Duta Pertiwi Nusantara and PT Citra Tubindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Citra Tubindo and Duta Pertiwi 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 Duta Pertiwi Nusantara are associated (or correlated) with PT Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Citra Tubindo has no effect on the direction of Duta Pertiwi i.e., Duta Pertiwi and PT Citra go up and down completely randomly.

Pair Corralation between Duta Pertiwi and PT Citra

Assuming the 90 days trading horizon Duta Pertiwi Nusantara is expected to under-perform the PT Citra. But the stock apears to be less risky and, when comparing its historical volatility, Duta Pertiwi Nusantara is 1.42 times less risky than PT Citra. The stock trades about -0.23 of its potential returns per unit of risk. The PT Citra Tubindo is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  280,000  in PT Citra Tubindo on December 26, 2024 and sell it today you would lose (60,000) from holding PT Citra Tubindo or give up 21.43% of portfolio value over 90 days.

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

Duta Pertiwi Nusantara  vs.  PT Citra Tubindo

Duta Pertiwi Nusantara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duta Pertiwi Nusantara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT Citra Tubindo

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Citra Tubindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Duta Pertiwi and PT Citra

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

The idea behind Duta Pertiwi Nusantara and PT Citra Tubindo 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.