Correlation Between Siloam International and Citatah Tbk

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

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

Diversification Opportunities for Siloam International and Citatah Tbk

0.09

Correlation Coefficient

Siloam International  Citatah Tbk

Significant diversification

The 3 months correlation between Siloam and Citatah is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Siloam International Hospitals and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Siloam International 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 Siloam International Hospitals 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 Siloam International i.e., Siloam International and Citatah Tbk go up and down completely randomly.

Pair Corralation between Siloam International and Citatah Tbk

Assuming the 90 days trading horizon Siloam International Hospitals is expected to under-perform the Citatah Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Siloam International Hospitals is 1.09 times less risky than Citatah Tbk. The stock trades about -0.22 of its potential returns per unit of risk. The Citatah Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,600  in Citatah Tbk on December 25, 2024 and sell it today you would earn a total of  0.00  from holding Citatah Tbk or generate 0.0% return on investment over 90 days.

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

Siloam International Hospitals  vs.  Citatah Tbk

Siloam International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siloam International Hospitals 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 Siloam International and Citatah Tbk

The main advantage of trading using opposite Siloam International and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siloam International 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 Siloam International Hospitals 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.