Correlation Between Humpuss Intermoda and Citra Marga

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

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

Diversification Opportunities for Humpuss Intermoda and Citra Marga

-0.89

Correlation Coefficient

Humpuss Intermoda  Citra Marga

Pay attention - limited upside

The 3 months correlation between Humpuss and Citra is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi and Citra Marga Nusaphala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Marga Nusaphala and Humpuss Intermoda 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 Humpuss Intermoda Transportasi are associated (or correlated) with Citra Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Marga Nusaphala has no effect on the direction of Humpuss Intermoda i.e., Humpuss Intermoda and Citra Marga go up and down completely randomly.

Pair Corralation between Humpuss Intermoda and Citra Marga

Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to generate 4.99 times more return on investment than Citra Marga. However, Humpuss Intermoda is 4.99 times more volatile than Citra Marga Nusaphala. It trades about 0.17 of its potential returns per unit of risk. Citra Marga Nusaphala is currently generating about -0.14 per unit of risk. If you would invest  28,600  in Humpuss Intermoda Transportasi on September 28, 2024 and sell it today you would earn a total of  12,600  from holding Humpuss Intermoda Transportasi or generate 44.06% return on investment over 90 days.

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

Humpuss Intermoda Transportasi  vs.  Citra Marga Nusaphala

Humpuss Intermoda

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Humpuss Intermoda Transportasi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Humpuss Intermoda disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Humpuss Intermoda and Citra Marga

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

The idea behind Humpuss Intermoda Transportasi and Citra Marga Nusaphala 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.