Correlation Between Ciptadana Asset and Tera Data

Can any of the company-specific risk be diversified away by investing in both Ciptadana Asset and Tera Data 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 Ciptadana Asset and Tera Data into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ciptadana Asset Management and Tera Data Indonusa, you can compare the effects of market volatilities on Ciptadana Asset and Tera Data 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 Ciptadana Asset with a short position of Tera Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciptadana Asset and Tera Data.

Diversification Opportunities for Ciptadana Asset and Tera Data

0.34

Correlation Coefficient

Ciptadana Asset  Tera Data

Weak diversification

The 3 months correlation between Ciptadana and Tera is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ciptadana Asset Management and Tera Data Indonusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tera Data Indonusa and Ciptadana Asset 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 Ciptadana Asset Management are associated (or correlated) with Tera Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tera Data Indonusa has no effect on the direction of Ciptadana Asset i.e., Ciptadana Asset and Tera Data go up and down completely randomly.

Pair Corralation between Ciptadana Asset and Tera Data

Assuming the 90 days trading horizon Ciptadana Asset is expected to generate 3.37 times less return on investment than Tera Data. In addition to that, Ciptadana Asset is 1.22 times more volatile than Tera Data Indonusa. It trades about 0.04 of its total potential returns per unit of risk. Tera Data Indonusa is currently generating about 0.18 per unit of volatility. If you would invest  11,332  in Tera Data Indonusa on September 13, 2024 and sell it today you would earn a total of  2,668  from holding Tera Data Indonusa or generate 23.54% return on investment over 90 days.

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

Ciptadana Asset Management  vs.  Tera Data Indonusa

Ciptadana Asset Mana

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ciptadana Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ciptadana Asset may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tera Data Indonusa

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Ciptadana Asset and Tera Data

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

The idea behind Ciptadana Asset Management and Tera Data Indonusa 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.