Correlation Between Sentul City and Wilmar Cahaya
Can any of the company-specific risk be diversified away by investing in both Sentul City and Wilmar Cahaya 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 Wilmar Cahaya 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 Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Sentul City and Wilmar Cahaya 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 Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Wilmar Cahaya.
Diversification Opportunities for Sentul City and Wilmar Cahaya
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentul and Wilmar is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Wilmar Cahaya Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar Cahaya Indonesia 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 Wilmar Cahaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar Cahaya Indonesia has no effect on the direction of Sentul City i.e., Sentul City and Wilmar Cahaya go up and down completely randomly.
Pair Corralation between Sentul City and Wilmar Cahaya
Assuming the 90 days trading horizon Sentul City Tbk is expected to under-perform the Wilmar Cahaya. In addition to that, Sentul City is 2.64 times more volatile than Wilmar Cahaya Indonesia. It trades about -0.18 of its total potential returns per unit of risk. Wilmar Cahaya Indonesia is currently generating about -0.01 per unit of volatility. If you would invest 207,000 in Wilmar Cahaya Indonesia on October 26, 2024 and sell it today you would lose (1,000.00) from holding Wilmar Cahaya Indonesia or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentul City Tbk vs. Wilmar Cahaya Indonesia
Performance |
| Timeline |
| Sentul City Tbk |
| Wilmar Cahaya Indonesia |
Sentul City and Wilmar Cahaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Wilmar Cahaya
The main advantage of trading using opposite Sentul City and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Wilmar Cahaya 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 Wilmar Cahaya will offset losses from the drop in Wilmar Cahaya'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 |
| Wilmar Cahaya vs. Alam Sutera Realty | Wilmar Cahaya vs. Sentul City Tbk | Wilmar Cahaya vs. Gajah Tunggal Tbk | Wilmar Cahaya vs. Akr Corporindo 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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