Correlation Between Putra Mandiri and Citatah Tbk

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

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

Diversification Opportunities for Putra Mandiri and Citatah Tbk

0.78

Correlation Coefficient

Putra Mandiri  Citatah Tbk

Poor diversification

The 3 months correlation between Putra and Citatah is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Putra Mandiri Jembar and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Putra Mandiri 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 Putra Mandiri Jembar 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 Putra Mandiri i.e., Putra Mandiri and Citatah Tbk go up and down completely randomly.

Pair Corralation between Putra Mandiri and Citatah Tbk

Assuming the 90 days trading horizon Putra Mandiri Jembar is expected to generate 0.63 times more return on investment than Citatah Tbk. However, Putra Mandiri Jembar is 1.59 times less risky than Citatah Tbk. It trades about -0.02 of its potential returns per unit of risk. Citatah Tbk is currently generating about -0.04 per unit of risk. If you would invest  16,300  in Putra Mandiri Jembar on September 12, 2024 and sell it today you would lose (3,600) from holding Putra Mandiri Jembar or give up 22.09% of portfolio value over 90 days.

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

Putra Mandiri Jembar  vs.  Citatah Tbk

Putra Mandiri Jembar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putra Mandiri Jembar 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Putra Mandiri and Citatah Tbk

The main advantage of trading using opposite Putra Mandiri and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putra Mandiri 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 Putra Mandiri Jembar 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.