Correlation Between Pembangunan Graha and Citatah Tbk

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

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

Diversification Opportunities for Pembangunan Graha and Citatah Tbk

-0.78

Correlation Coefficient

Pembangunan Graha  Citatah Tbk

Pay attention - limited upside

The 3 months correlation between Pembangunan and Citatah is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Graha Lestari and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk and Pembangunan Graha 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 Pembangunan Graha Lestari 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 Pembangunan Graha i.e., Pembangunan Graha and Citatah Tbk go up and down completely randomly.

Pair Corralation between Pembangunan Graha and Citatah Tbk

Assuming the 90 days trading horizon Pembangunan Graha Lestari is expected to generate 1.11 times more return on investment than Citatah Tbk. However, Pembangunan Graha is 1.11 times more volatile than Citatah Tbk. It trades about 0.06 of its potential returns per unit of risk. Citatah Tbk is currently generating about -0.09 per unit of risk. If you would invest  16,800  in Pembangunan Graha Lestari on September 14, 2024 and sell it today you would earn a total of  1,600  from holding Pembangunan Graha Lestari or generate 9.52% return on investment over 90 days.

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

Pembangunan Graha Lestari  vs.  Citatah Tbk

Pembangunan Graha Lestari

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pembangunan Graha Lestari are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pembangunan Graha may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Citatah Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citatah 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 Pembangunan Graha and Citatah Tbk

The main advantage of trading using opposite Pembangunan Graha and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembangunan Graha 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 Pembangunan Graha Lestari 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.