Correlation Between Sentul City and Alam Sutera
Can any of the company-specific risk be diversified away by investing in both Sentul City and Alam Sutera 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 Sentul City and Alam Sutera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentul City Tbk and Alam Sutera Realty, you can compare the effects of market volatilities on Sentul City and Alam Sutera 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 Sentul City with a short position of Alam Sutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Alam Sutera.
Diversification Opportunities for Sentul City and Alam Sutera
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentul and Alam is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Alam Sutera Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alam Sutera Realty and Sentul City 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 Sentul City Tbk are associated (or correlated) with Alam Sutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alam Sutera Realty has no effect on the direction of Sentul City i.e., Sentul City and Alam Sutera go up and down completely randomly.
Pair Corralation between Sentul City and Alam Sutera
Assuming the 90 days trading horizon Sentul City Tbk is expected to generate 1.02 times more return on investment than Alam Sutera. However, Sentul City is 1.02 times more volatile than Alam Sutera Realty. It trades about -0.34 of its potential returns per unit of risk. Alam Sutera Realty is currently generating about -0.68 per unit of risk. If you would invest 4,600 in Sentul City Tbk on August 24, 2024 and sell it today you would lose (800.00) from holding Sentul City Tbk or give up 17.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentul City Tbk vs. Alam Sutera Realty
Performance |
| Timeline |
| Sentul City Tbk |
| Alam Sutera Realty |
Sentul City and Alam Sutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Alam Sutera
The main advantage of trading using opposite Sentul City and Alam Sutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Alam Sutera 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 Alam Sutera will offset losses from the drop in Alam Sutera's long position.| Sentul City vs. Alam Sutera Realty | Sentul City vs. Kawasan Industri Jababeka | Sentul City vs. Lippo Karawaci Tbk | Sentul City vs. Ciputra Development Tbk |
| Alam Sutera vs. Agung Podomoro Land | Alam Sutera vs. Surya Semesta Internusa | Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Sentul City Tbk |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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