Correlation Between Bank Ina and Catur Sentosa

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

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

Diversification Opportunities for Bank Ina and Catur Sentosa

-0.36

Correlation Coefficient

Bank Ina  Catur Sentosa

Very good diversification

The 3 months correlation between Bank and Catur is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ina Perdana 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 Bank Ina 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 Bank Ina Perdana 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 Bank Ina i.e., Bank Ina and Catur Sentosa go up and down completely randomly.

Pair Corralation between Bank Ina and Catur Sentosa

Assuming the 90 days trading horizon Bank Ina Perdana is expected to generate 0.32 times more return on investment than Catur Sentosa. However, Bank Ina Perdana is 3.09 times less risky than Catur Sentosa. It trades about -0.02 of its potential returns per unit of risk. Catur Sentosa Adiprana is currently generating about -0.02 per unit of risk. If you would invest  409,000  in Bank Ina Perdana on September 12, 2024 and sell it today you would lose (5,000) from holding Bank Ina Perdana or give up 1.22% of portfolio value over 90 days.

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

Bank Ina Perdana  vs.  Catur Sentosa Adiprana

Bank Ina Perdana

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bank Ina and Catur Sentosa

The main advantage of trading using opposite Bank Ina and Catur Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Ina 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 Bank Ina Perdana 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.