Correlation Between Citra Putra and Arkha Jayanti

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

By analyzing existing cross correlation between Citra Putra Realty and Arkha Jayanti Persada, you can compare the effects of market volatilities on Citra Putra and Arkha Jayanti 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 Putra with a short position of Arkha Jayanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citra Putra and Arkha Jayanti.

Diversification Opportunities for Citra Putra and Arkha Jayanti

-0.58

Correlation Coefficient

Citra Putra  Arkha Jayanti

Excellent diversification

The 3 months correlation between Citra and Arkha is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citra Putra Realty and Arkha Jayanti Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkha Jayanti Persada and Citra Putra 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 Putra Realty are associated (or correlated) with Arkha Jayanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkha Jayanti Persada has no effect on the direction of Citra Putra i.e., Citra Putra and Arkha Jayanti go up and down completely randomly.

Pair Corralation between Citra Putra and Arkha Jayanti

Assuming the 90 days trading horizon Citra Putra Realty is expected to generate 0.4 times more return on investment than Arkha Jayanti. However, Citra Putra Realty is 2.49 times less risky than Arkha Jayanti. It trades about -0.27 of its potential returns per unit of risk. Arkha Jayanti Persada is currently generating about -0.79 per unit of risk. If you would invest  36,000  in Citra Putra Realty on February 7, 2024 and sell it today you would lose (3,000) from holding Citra Putra Realty or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Citra Putra Realty  vs.  Arkha Jayanti Persada

Citra Putra Realty

Risk-Adjusted Performance

37 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citra Putra Realty are ranked lower than 37 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Citra Putra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arkha Jayanti Persada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arkha Jayanti Persada 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 basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citra Putra and Arkha Jayanti

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

The idea behind Citra Putra Realty and Arkha Jayanti Persada 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.