Correlation Between Sentul City and Gudang Garam
Can any of the company-specific risk be diversified away by investing in both Sentul City and Gudang Garam 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 Gudang Garam 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 Gudang Garam Tbk, you can compare the effects of market volatilities on Sentul City and Gudang Garam 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 Gudang Garam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Gudang Garam.
Diversification Opportunities for Sentul City and Gudang Garam
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sentul and Gudang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Gudang Garam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudang Garam Tbk 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 Gudang Garam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudang Garam Tbk has no effect on the direction of Sentul City i.e., Sentul City and Gudang Garam go up and down completely randomly.
Pair Corralation between Sentul City and Gudang Garam
Assuming the 90 days trading horizon Sentul City Tbk is expected to generate 2.67 times more return on investment than Gudang Garam. However, Sentul City is 2.67 times more volatile than Gudang Garam Tbk. It trades about 0.03 of its potential returns per unit of risk. Gudang Garam Tbk is currently generating about -0.16 per unit of risk. If you would invest 5,000 in Sentul City Tbk on November 5, 2024 and sell it today you would earn a total of 500.00 from holding Sentul City Tbk or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentul City Tbk vs. Gudang Garam Tbk
Performance |
| Timeline |
| Sentul City Tbk |
| Gudang Garam Tbk |
Sentul City and Gudang Garam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Gudang Garam
The main advantage of trading using opposite Sentul City and Gudang Garam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Gudang Garam 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 Gudang Garam will offset losses from the drop in Gudang Garam'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 |
| Gudang Garam vs. Hanjaya Mandala Sampoerna | Gudang Garam vs. Unilever Indonesia Tbk | Gudang Garam vs. PT Indofood Sukses | Gudang Garam vs. United Tractors 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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