Correlation Between PT Century and Karya Bersama

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

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

Diversification Opportunities for PT Century and Karya Bersama

0.0

Correlation Coefficient

PT Century  Karya Bersama

Pay attention - limited upside

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

Pair Corralation between PT Century and Karya Bersama

If you would invest  2,000  in Karya Bersama Anugerah on September 15, 2024 and sell it today you would earn a total of  200.00  from holding Karya Bersama Anugerah or generate 10.0% return on investment over 90 days.

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

PT Century Textile  vs.  Karya Bersama Anugerah

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.

Karya Bersama Anugerah

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Karya Bersama Anugerah are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Karya Bersama disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Century and Karya Bersama

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

The idea behind PT Century Textile and Karya Bersama Anugerah 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.