Correlation Between PT Century and Argo Pantes
Can any of the company-specific risk be diversified away by investing in both PT Century and Argo Pantes 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 PT Century and Argo Pantes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Century Textile and Argo Pantes Tbk, you can compare the effects of market volatilities on PT Century and Argo Pantes 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 PT Century with a short position of Argo Pantes. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Century and Argo Pantes.
Diversification Opportunities for PT Century and Argo Pantes
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNTX and Argo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Century Textile and Argo Pantes Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Pantes Tbk and PT Century 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 PT Century Textile are associated (or correlated) with Argo Pantes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Pantes Tbk has no effect on the direction of PT Century i.e., PT Century and Argo Pantes go up and down completely randomly.
Pair Corralation between PT Century and Argo Pantes
Assuming the 90 days trading horizon PT Century is expected to generate 2.17 times less return on investment than Argo Pantes. But when comparing it to its historical volatility, PT Century Textile is 6.36 times less risky than Argo Pantes. It trades about 0.1 of its potential returns per unit of risk. Argo Pantes Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 86,000 in Argo Pantes Tbk on August 25, 2024 and sell it today you would earn a total of 14,000 from holding Argo Pantes Tbk or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
PT Century Textile vs. Argo Pantes Tbk
Performance |
| Timeline |
| PT Century Textile |
| Argo Pantes Tbk |
PT Century and Argo Pantes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Century and Argo Pantes
The main advantage of trading using opposite PT Century and Argo Pantes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Century position performs unexpectedly, Argo Pantes 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 Argo Pantes will offset losses from the drop in Argo Pantes' long position.| PT Century vs. Eratex Djaja Tbk | PT Century vs. Ever Shine Textile | PT Century vs. Argo Pantes Tbk | PT Century vs. Primarindo Asia Infrastructure |
| Argo Pantes vs. Sepatu Bata Tbk | Argo Pantes vs. Ever Shine Textile | Argo Pantes vs. Eratex Djaja Tbk | Argo Pantes vs. PT Century Textile |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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