Correlation Between Pan Brothers and Catur Sentosa

Can any of the company-specific risk be diversified away by investing in both Pan Brothers and Catur Sentosa 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 Pan Brothers and Catur Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Brothers Tbk and Catur Sentosa Adiprana, you can compare the effects of market volatilities on Pan Brothers and Catur Sentosa 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 Pan Brothers with a short position of Catur Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Brothers and Catur Sentosa.

Diversification Opportunities for Pan Brothers and Catur Sentosa

-0.78

Correlation Coefficient

Pan Brothers  Catur Sentosa

Pay attention - limited upside

The 3 months correlation between Pan and Catur is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pan Brothers Tbk and Catur Sentosa Adiprana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catur Sentosa Adiprana and Pan Brothers 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 Pan Brothers Tbk are associated (or correlated) with Catur Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catur Sentosa Adiprana has no effect on the direction of Pan Brothers i.e., Pan Brothers and Catur Sentosa go up and down completely randomly.

Pair Corralation between Pan Brothers and Catur Sentosa

If you would invest  45,200  in Catur Sentosa Adiprana on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Catur Sentosa Adiprana or generate 0.0% return on investment over 90 days.

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

Pan Brothers Tbk  vs.  Catur Sentosa Adiprana

Pan Brothers Tbk

Risk-Adjusted Performance

9 of 100

OK

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

Catur Sentosa Adiprana

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Pan Brothers and Catur Sentosa

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

The idea behind Pan Brothers Tbk and Catur Sentosa Adiprana 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.