Correlation Between Catur Sentosa and Graha Layar

Can any of the company-specific risk be diversified away by investing in both Catur Sentosa and Graha Layar 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 Graha Layar 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 Graha Layar Prima, you can compare the effects of market volatilities on Catur Sentosa and Graha Layar 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 Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catur Sentosa and Graha Layar.

Diversification Opportunities for Catur Sentosa and Graha Layar

0.87

Correlation Coefficient

Catur Sentosa  Graha Layar

Very poor diversification

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

Pair Corralation between Catur Sentosa and Graha Layar

Assuming the 90 days trading horizon Catur Sentosa Adiprana is expected to under-perform the Graha Layar. But the stock apears to be less risky and, when comparing its historical volatility, Catur Sentosa Adiprana is 1.73 times less risky than Graha Layar. The stock trades about -0.04 of its potential returns per unit of risk. The Graha Layar Prima is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  205,000  in Graha Layar Prima on December 4, 2024 and sell it today you would lose (25,000) from holding Graha Layar Prima or give up 12.2% of portfolio value over 90 days.

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

Catur Sentosa Adiprana  vs.  Graha Layar Prima

Catur Sentosa Adiprana

Risk-Adjusted Performance

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 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.

Graha Layar Prima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graha Layar Prima 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 Catur Sentosa and Graha Layar

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

The idea behind Catur Sentosa Adiprana and Graha Layar Prima 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.