Correlation Between Sentul City and Gozco Plantations
Can any of the company-specific risk be diversified away by investing in both Sentul City and Gozco Plantations 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 Gozco Plantations 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 Gozco Plantations Tbk, you can compare the effects of market volatilities on Sentul City and Gozco Plantations 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 Gozco Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Gozco Plantations.
Diversification Opportunities for Sentul City and Gozco Plantations
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sentul and Gozco is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Gozco Plantations Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gozco Plantations 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 Gozco Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gozco Plantations Tbk has no effect on the direction of Sentul City i.e., Sentul City and Gozco Plantations go up and down completely randomly.
Pair Corralation between Sentul City and Gozco Plantations
Assuming the 90 days trading horizon Sentul City Tbk is expected to under-perform the Gozco Plantations. In addition to that, Sentul City is 1.51 times more volatile than Gozco Plantations Tbk. It trades about -0.07 of its total potential returns per unit of risk. Gozco Plantations Tbk is currently generating about 0.01 per unit of volatility. If you would invest 10,000 in Gozco Plantations Tbk on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Gozco Plantations Tbk or generate 0.0% 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. Gozco Plantations Tbk
Performance |
| Timeline |
| Sentul City Tbk |
| Gozco Plantations Tbk |
Sentul City and Gozco Plantations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentul City and Gozco Plantations
The main advantage of trading using opposite Sentul City and Gozco Plantations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Gozco Plantations 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 Gozco Plantations will offset losses from the drop in Gozco Plantations' 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 |
| Gozco Plantations vs. Indofood Cbp Sukses | Gozco Plantations vs. Bank BRISyariah Tbk | Gozco Plantations vs. Mitra Pinasthika Mustika | Gozco Plantations vs. Jakarta Int Hotels |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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