Correlation Between Citra Marga and Bukaka Teknik

Can any of the company-specific risk be diversified away by investing in both Citra Marga and Bukaka Teknik 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 Citra Marga and Bukaka Teknik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citra Marga Nusaphala and Bukaka Teknik Utama, you can compare the effects of market volatilities on Citra Marga and Bukaka Teknik 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 Citra Marga with a short position of Bukaka Teknik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Marga and Bukaka Teknik.

Diversification Opportunities for Citra Marga and Bukaka Teknik

0.81

Correlation Coefficient

Citra Marga  Bukaka Teknik

Very poor diversification

The 3 months correlation between Citra and Bukaka is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citra Marga Nusaphala and Bukaka Teknik Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukaka Teknik Utama and Citra Marga 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 Citra Marga Nusaphala are associated (or correlated) with Bukaka Teknik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukaka Teknik Utama has no effect on the direction of Citra Marga i.e., Citra Marga and Bukaka Teknik go up and down completely randomly.

Pair Corralation between Citra Marga and Bukaka Teknik

Assuming the 90 days trading horizon Citra Marga Nusaphala is expected to generate 0.59 times more return on investment than Bukaka Teknik. However, Citra Marga Nusaphala is 1.7 times less risky than Bukaka Teknik. It trades about -0.17 of its potential returns per unit of risk. Bukaka Teknik Utama is currently generating about -0.11 per unit of risk. If you would invest  150,500  in Citra Marga Nusaphala on September 18, 2024 and sell it today you would lose (11,000) from holding Citra Marga Nusaphala or give up 7.31% of portfolio value over 90 days.

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

Citra Marga Nusaphala  vs.  Bukaka Teknik Utama

Citra Marga Nusaphala

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citra Marga Nusaphala has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Bukaka Teknik Utama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bukaka Teknik Utama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Citra Marga and Bukaka Teknik

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

The idea behind Citra Marga Nusaphala and Bukaka Teknik Utama 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..