Correlation Between Karya Bersama and PT Century

Can any of the company-specific risk be diversified away by investing in both Karya Bersama and PT Century 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 Karya Bersama and PT Century into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Karya Bersama Anugerah and PT Century Textile, you can compare the effects of market volatilities on Karya Bersama and PT Century 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 Karya Bersama with a short position of PT Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karya Bersama and PT Century.

Diversification Opportunities for Karya Bersama and PT Century

0.0

Correlation Coefficient

Karya Bersama  PT Century

Pay attention - limited upside

The 3 months correlation between Karya and CNTX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Karya Bersama Anugerah and PT Century Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Century Textile and Karya Bersama 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 Karya Bersama Anugerah are associated (or correlated) with PT Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Century Textile has no effect on the direction of Karya Bersama i.e., Karya Bersama and PT Century go up and down completely randomly.

Pair Corralation between Karya Bersama and PT Century

If you would invest  2,000  in Karya Bersama Anugerah on September 15, 2024 and sell it today you would earn a total of  200.00  from holding Karya Bersama Anugerah or generate 10.0% return on investment over 90 days.

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

Karya Bersama Anugerah  vs.  PT Century Textile

Karya Bersama Anugerah

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Karya Bersama Anugerah are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Karya Bersama disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Century Textile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Century Textile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Century is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Karya Bersama and PT Century

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

The idea behind Karya Bersama Anugerah and PT Century Textile 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.