Correlation Between Astra Graphia and Catur Sentosa

Can any of the company-specific risk be diversified away by investing in both Astra Graphia and Catur Sentosa 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 Astra Graphia and Catur Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astra Graphia Tbk and Catur Sentosa Adiprana, you can compare the effects of market volatilities on Astra Graphia and Catur Sentosa 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 Astra Graphia with a short position of Catur Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Graphia and Catur Sentosa.

Diversification Opportunities for Astra Graphia and Catur Sentosa

-0.17

Correlation Coefficient

Astra Graphia  Catur Sentosa

Good diversification

The 3 months correlation between Astra and Catur is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Astra Graphia Tbk and Catur Sentosa Adiprana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catur Sentosa Adiprana and Astra Graphia 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 Astra Graphia Tbk are associated (or correlated) with Catur Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catur Sentosa Adiprana has no effect on the direction of Astra Graphia i.e., Astra Graphia and Catur Sentosa go up and down completely randomly.

Pair Corralation between Astra Graphia and Catur Sentosa

Assuming the 90 days trading horizon Astra Graphia Tbk is expected to generate 0.45 times more return on investment than Catur Sentosa. However, Astra Graphia Tbk is 2.22 times less risky than Catur Sentosa. It trades about 0.11 of its potential returns per unit of risk. Catur Sentosa Adiprana is currently generating about -0.03 per unit of risk. If you would invest  82,655  in Astra Graphia Tbk on September 14, 2024 and sell it today you would earn a total of  6,345  from holding Astra Graphia Tbk or generate 7.68% return on investment over 90 days.

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

Astra Graphia Tbk  vs.  Catur Sentosa Adiprana

Astra Graphia Tbk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astra Graphia Tbk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Astra Graphia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Catur Sentosa Adiprana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catur Sentosa Adiprana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Catur Sentosa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Astra Graphia and Catur Sentosa

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

The idea behind Astra Graphia Tbk and Catur Sentosa Adiprana 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.