Correlation Between Sepatu Bata and PT Century
Can any of the company-specific risk be diversified away by investing in both Sepatu Bata 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 Sepatu Bata and PT Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sepatu Bata Tbk and PT Century Textile, you can compare the effects of market volatilities on Sepatu Bata 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 Sepatu Bata with a short position of PT Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sepatu Bata and PT Century.
Diversification Opportunities for Sepatu Bata and PT Century
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sepatu and CNTX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sepatu Bata Tbk 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 Sepatu Bata 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 Sepatu Bata Tbk 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 Sepatu Bata i.e., Sepatu Bata and PT Century go up and down completely randomly.
Pair Corralation between Sepatu Bata and PT Century
Assuming the 90 days trading horizon Sepatu Bata Tbk is expected to under-perform the PT Century. In addition to that, Sepatu Bata is 5.35 times more volatile than PT Century Textile. It trades about -0.11 of its total potential returns per unit of risk. PT Century Textile is currently generating about 0.1 per unit of volatility. If you would invest 12,200 in PT Century Textile on August 25, 2024 and sell it today you would earn a total of 2,000 from holding PT Century Textile or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
Sepatu Bata Tbk vs. PT Century Textile
Performance |
| Timeline |
| Sepatu Bata Tbk |
| PT Century Textile |
Sepatu Bata and PT Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sepatu Bata and PT Century
The main advantage of trading using opposite Sepatu Bata and PT Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sepatu Bata 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.| Sepatu Bata vs. Indo Kordsa Tbk | Sepatu Bata vs. Goodyear Indonesia Tbk | Sepatu Bata vs. Argo Pantes Tbk | Sepatu Bata vs. Primarindo Asia Infrastructure |
| PT Century vs. Eratex Djaja Tbk | PT Century vs. Ever Shine Textile | PT Century vs. Argo Pantes Tbk | PT Century vs. Primarindo Asia Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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