Correlation Between Jakarta Int and Citatah Tbk

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

By analyzing existing cross correlation between Jakarta Int Hotels and Citatah Tbk, you can compare the effects of market volatilities on Jakarta Int and Citatah Tbk 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 Jakarta Int with a short position of Citatah Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jakarta Int and Citatah Tbk.

Diversification Opportunities for Jakarta Int and Citatah Tbk

-0.08

Correlation Coefficient

Jakarta Int  Citatah Tbk

Good diversification

The 3 months correlation between Jakarta and Citatah is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jakarta Int Hotels and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Jakarta Int 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 Jakarta Int Hotels are associated (or correlated) with Citatah Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citatah Tbk has no effect on the direction of Jakarta Int i.e., Jakarta Int and Citatah Tbk go up and down completely randomly.

Pair Corralation between Jakarta Int and Citatah Tbk

Assuming the 90 days trading horizon Jakarta Int Hotels is expected to under-perform the Citatah Tbk. In addition to that, Jakarta Int is 3.23 times more volatile than Citatah Tbk. It trades about -0.2 of its total potential returns per unit of risk. Citatah Tbk is currently generating about -0.02 per unit of volatility. If you would invest  2,500  in Citatah Tbk on December 1, 2024 and sell it today you would lose (100.00) from holding Citatah Tbk or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Jakarta Int Hotels  vs.  Citatah Tbk

Jakarta Int Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jakarta Int Hotels 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.

Citatah Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citatah Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Citatah Tbk 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 Jakarta Int and Citatah Tbk

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

The idea behind Jakarta Int Hotels and Citatah 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.