Correlation Between Sepatu Bata and PT Century

Can any of the company-specific risk be diversified away by investing in both Sepatu Bata and PT Century 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 Sepatu Bata and PT Century into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sepatu Bata Tbk and PT Century Textile, you can compare the effects of market volatilities on Sepatu Bata and PT Century 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 Sepatu Bata with a short position of PT Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sepatu Bata and PT Century.

Diversification Opportunities for Sepatu Bata and PT Century

0.0

Correlation Coefficient

Sepatu Bata  PT Century

Pay attention - limited upside

The 3 months correlation between Sepatu and CNTX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sepatu Bata Tbk and PT Century Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Century Textile and Sepatu Bata 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 Sepatu Bata Tbk are associated (or correlated) with PT Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Century Textile has no effect on the direction of Sepatu Bata i.e., Sepatu Bata and PT Century go up and down completely randomly.

Pair Corralation between Sepatu Bata and PT Century

If you would invest  14,200  in PT Century Textile on September 15, 2024 and sell it today you would earn a total of  0.00  from holding PT Century Textile or generate 0.0% return on investment over 90 days.

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

Sepatu Bata Tbk  vs.  PT Century Textile

Sepatu Bata Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sepatu Bata 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.

PT Century Textile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Century Textile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Century 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 Sepatu Bata and PT Century

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

The idea behind Sepatu Bata Tbk and PT Century Textile 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.