Correlation Between Sentul City and Citra Marga
Can any of the company-specific risk be diversified away by investing in both Sentul City and Citra Marga 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 Citra Marga 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 Citra Marga Nusaphala, you can compare the effects of market volatilities on Sentul City and Citra Marga 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 Citra Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Citra Marga.
Diversification Opportunities for Sentul City and Citra Marga
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sentul and Citra is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Citra Marga Nusaphala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Marga Nusaphala 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 Citra Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Marga Nusaphala has no effect on the direction of Sentul City i.e., Sentul City and Citra Marga go up and down completely randomly.
Pair Corralation between Sentul City and Citra Marga
Assuming the 90 days trading horizon Sentul City Tbk is expected to generate 2.79 times more return on investment than Citra Marga. However, Sentul City is 2.79 times more volatile than Citra Marga Nusaphala. It trades about 0.09 of its potential returns per unit of risk. Citra Marga Nusaphala is currently generating about -0.07 per unit of risk. If you would invest 4,200 in Sentul City Tbk on September 2, 2024 and sell it today you would earn a total of 600.00 from holding Sentul City Tbk or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentul City Tbk vs. Citra Marga Nusaphala
Performance |
| Timeline |
| Sentul City Tbk |
| Citra Marga Nusaphala |
Sentul City and Citra Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Citra Marga
The main advantage of trading using opposite Sentul City and Citra Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Citra Marga 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 Citra Marga will offset losses from the drop in Citra Marga'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 |
| Citra Marga vs. Matahari Department Store | Citra Marga vs. Multi Medika Internasional | Citra Marga vs. Visi Media Asia | Citra Marga vs. Bayan Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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