Correlation Between Victoria Insurance and Cipta Selera

Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and Cipta Selera 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 Victoria Insurance and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victoria Insurance Tbk and Cipta Selera Murni, you can compare the effects of market volatilities on Victoria Insurance and Cipta Selera 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 Victoria Insurance with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Cipta Selera.

Diversification Opportunities for Victoria Insurance and Cipta Selera

-0.86

Correlation Coefficient

Victoria Insurance  Cipta Selera

Pay attention - limited upside

The 3 months correlation between Victoria and Cipta is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and Victoria Insurance 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 Victoria Insurance Tbk are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Cipta Selera go up and down completely randomly.

Pair Corralation between Victoria Insurance and Cipta Selera

Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to under-perform the Cipta Selera. In addition to that, Victoria Insurance is 1.14 times more volatile than Cipta Selera Murni. It trades about -0.08 of its total potential returns per unit of risk. Cipta Selera Murni is currently generating about 0.1 per unit of volatility. If you would invest  302,000  in Cipta Selera Murni on October 12, 2024 and sell it today you would earn a total of  8,000  from holding Cipta Selera Murni or generate 2.65% return on investment over 90 days.

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

Victoria Insurance Tbk  vs.  Cipta Selera Murni

Victoria Insurance Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victoria Insurance Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Victoria Insurance is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Cipta Selera Murni

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cipta Selera Murni are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cipta Selera may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Victoria Insurance and Cipta Selera

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

The idea behind Victoria Insurance Tbk and Cipta Selera Murni 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.