Correlation Between Asuransi Harta and Panorama Sentrawisata

Can any of the company-specific risk be diversified away by investing in both Asuransi Harta and Panorama Sentrawisata 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 Asuransi Harta and Panorama Sentrawisata into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asuransi Harta Aman and Panorama Sentrawisata Tbk, you can compare the effects of market volatilities on Asuransi Harta and Panorama Sentrawisata 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 Asuransi Harta with a short position of Panorama Sentrawisata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Harta and Panorama Sentrawisata.

Diversification Opportunities for Asuransi Harta and Panorama Sentrawisata

-0.87

Correlation Coefficient

Asuransi Harta  Panorama Sentrawisata

Pay attention - limited upside

The 3 months correlation between Asuransi and Panorama is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Harta Aman and Panorama Sentrawisata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panorama Sentrawisata Tbk and Asuransi Harta 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 Asuransi Harta Aman are associated (or correlated) with Panorama Sentrawisata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panorama Sentrawisata Tbk has no effect on the direction of Asuransi Harta i.e., Asuransi Harta and Panorama Sentrawisata go up and down completely randomly.

Pair Corralation between Asuransi Harta and Panorama Sentrawisata

Assuming the 90 days trading horizon Asuransi Harta Aman is expected to under-perform the Panorama Sentrawisata. In addition to that, Asuransi Harta is 1.78 times more volatile than Panorama Sentrawisata Tbk. It trades about -0.21 of its total potential returns per unit of risk. Panorama Sentrawisata Tbk is currently generating about 0.28 per unit of volatility. If you would invest  46,200  in Panorama Sentrawisata Tbk on September 12, 2024 and sell it today you would earn a total of  8,800  from holding Panorama Sentrawisata Tbk or generate 19.05% return on investment over 90 days.

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

Asuransi Harta Aman  vs.  Panorama Sentrawisata Tbk

Asuransi Harta Aman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Harta Aman 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.

Panorama Sentrawisata Tbk

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Panorama Sentrawisata Tbk are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panorama Sentrawisata disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asuransi Harta and Panorama Sentrawisata

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

The idea behind Asuransi Harta Aman and Panorama Sentrawisata Tbk 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.