Correlation Between Centratama Telekomunikasi and Inti Bangun

Can any of the company-specific risk be diversified away by investing in both Centratama Telekomunikasi and Inti Bangun 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 Centratama Telekomunikasi and Inti Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Centratama Telekomunikasi Ind and Inti Bangun Sejahtera, you can compare the effects of market volatilities on Centratama Telekomunikasi and Inti Bangun 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 Centratama Telekomunikasi with a short position of Inti Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centratama Telekomunikasi and Inti Bangun.

Diversification Opportunities for Centratama Telekomunikasi and Inti Bangun

-0.02

Correlation Coefficient

Centratama Telekomunikasi  Inti Bangun

Good diversification

The 3 months correlation between Centratama and Inti is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Centratama Telekomunikasi Ind and Inti Bangun Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inti Bangun Sejahtera and Centratama Telekomunikasi 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 Centratama Telekomunikasi Ind are associated (or correlated) with Inti Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inti Bangun Sejahtera has no effect on the direction of Centratama Telekomunikasi i.e., Centratama Telekomunikasi and Inti Bangun go up and down completely randomly.

Pair Corralation between Centratama Telekomunikasi and Inti Bangun

Assuming the 90 days trading horizon Centratama Telekomunikasi Ind is expected to under-perform the Inti Bangun. In addition to that, Centratama Telekomunikasi is 1.51 times more volatile than Inti Bangun Sejahtera. It trades about -0.03 of its total potential returns per unit of risk. Inti Bangun Sejahtera is currently generating about 0.0 per unit of volatility. If you would invest  627,500  in Inti Bangun Sejahtera on October 12, 2024 and sell it today you would lose (65,000) from holding Inti Bangun Sejahtera or give up 10.36% of portfolio value over 90 days.

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

Centratama Telekomunikasi Ind  vs.  Inti Bangun Sejahtera

Centratama Telekomunikasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centratama Telekomunikasi Ind 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.

Inti Bangun Sejahtera

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inti Bangun Sejahtera are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Inti Bangun disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centratama Telekomunikasi and Inti Bangun

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

The idea behind Centratama Telekomunikasi Ind and Inti Bangun Sejahtera 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.