Correlation Between Cita Mineral and Intiland Development

Can any of the company-specific risk be diversified away by investing in both Cita Mineral and Intiland Development 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 Cita Mineral and Intiland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cita Mineral Investindo and Intiland Development Tbk, you can compare the effects of market volatilities on Cita Mineral and Intiland Development 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 Cita Mineral with a short position of Intiland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cita Mineral and Intiland Development.

Diversification Opportunities for Cita Mineral and Intiland Development

-0.83

Correlation Coefficient

Cita Mineral  Intiland Development

Pay attention - limited upside

The 3 months correlation between Cita and Intiland is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cita Mineral Investindo and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Cita Mineral 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 Cita Mineral Investindo are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Cita Mineral i.e., Cita Mineral and Intiland Development go up and down completely randomly.

Pair Corralation between Cita Mineral and Intiland Development

Assuming the 90 days trading horizon Cita Mineral Investindo is expected to generate 2.36 times more return on investment than Intiland Development. However, Cita Mineral is 2.36 times more volatile than Intiland Development Tbk. It trades about 0.15 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.27 per unit of risk. If you would invest  251,000  in Cita Mineral Investindo on September 18, 2024 and sell it today you would earn a total of  99,000  from holding Cita Mineral Investindo or generate 39.44% return on investment over 90 days.

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

Cita Mineral Investindo  vs.  Intiland Development Tbk

Cita Mineral Investindo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cita Mineral Investindo are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cita Mineral disclosed solid returns over the last few months and may actually be approaching a breakup point.

Intiland Development Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intiland Development 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 Cita Mineral and Intiland Development

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

The idea behind Cita Mineral Investindo and Intiland Development 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.