Correlation Between Panca Budi and Satyamitra Kemas

Can any of the company-specific risk be diversified away by investing in both Panca Budi and Satyamitra Kemas 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 Panca Budi and Satyamitra Kemas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Panca Budi Idaman and Satyamitra Kemas Lestari, you can compare the effects of market volatilities on Panca Budi and Satyamitra Kemas 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 Panca Budi with a short position of Satyamitra Kemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panca Budi and Satyamitra Kemas.

Diversification Opportunities for Panca Budi and Satyamitra Kemas

-0.75

Correlation Coefficient

Panca Budi  Satyamitra Kemas

Pay attention - limited upside

The 3 months correlation between Panca and Satyamitra is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Panca Budi Idaman and Satyamitra Kemas Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satyamitra Kemas Lestari and Panca Budi 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 Panca Budi Idaman are associated (or correlated) with Satyamitra Kemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satyamitra Kemas Lestari has no effect on the direction of Panca Budi i.e., Panca Budi and Satyamitra Kemas go up and down completely randomly.

Pair Corralation between Panca Budi and Satyamitra Kemas

Assuming the 90 days trading horizon Panca Budi Idaman is expected to generate 1.3 times more return on investment than Satyamitra Kemas. However, Panca Budi is 1.3 times more volatile than Satyamitra Kemas Lestari. It trades about 0.13 of its potential returns per unit of risk. Satyamitra Kemas Lestari is currently generating about -0.14 per unit of risk. If you would invest  46,000  in Panca Budi Idaman on September 20, 2024 and sell it today you would earn a total of  7,000  from holding Panca Budi Idaman or generate 15.22% return on investment over 90 days.

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

Panca Budi Idaman  vs.  Satyamitra Kemas Lestari

Panca Budi Idaman

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panca Budi Idaman are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panca Budi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Satyamitra Kemas Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satyamitra Kemas Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Panca Budi and Satyamitra Kemas

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

The idea behind Panca Budi Idaman and Satyamitra Kemas Lestari 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.