Correlation Between Catur Sentosa and Mitrabara Adiperdana

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

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

Diversification Opportunities for Catur Sentosa and Mitrabara Adiperdana

0.76

Correlation Coefficient

Catur Sentosa  Mitrabara Adiperdana

Poor diversification

The 3 months correlation between Catur and Mitrabara is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Catur Sentosa Adiprana and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana and Catur Sentosa 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 Catur Sentosa Adiprana are associated (or correlated) with Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Catur Sentosa i.e., Catur Sentosa and Mitrabara Adiperdana go up and down completely randomly.

Pair Corralation between Catur Sentosa and Mitrabara Adiperdana

Assuming the 90 days trading horizon Catur Sentosa Adiprana is expected to generate 1.98 times more return on investment than Mitrabara Adiperdana. However, Catur Sentosa is 1.98 times more volatile than Mitrabara Adiperdana PT. It trades about -0.03 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.19 per unit of risk. If you would invest  48,200  in Catur Sentosa Adiprana on September 13, 2024 and sell it today you would lose (3,200) from holding Catur Sentosa Adiprana or give up 6.64% of portfolio value over 90 days.

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

Catur Sentosa Adiprana  vs.  Mitrabara Adiperdana PT

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.

Mitrabara Adiperdana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitrabara Adiperdana PT 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.

Pair Trading with Catur Sentosa and Mitrabara Adiperdana

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

The idea behind Catur Sentosa Adiprana and Mitrabara Adiperdana PT 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.