Correlation Between Sentra Food and Mnc Kapital
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Mnc Kapital 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 Sentra Food and Mnc Kapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentra Food Indonesia and Mnc Kapital Indonesia, you can compare the effects of market volatilities on Sentra Food and Mnc Kapital 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 Sentra Food with a short position of Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Mnc Kapital.
Diversification Opportunities for Sentra Food and Mnc Kapital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sentra and Mnc is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia and Sentra Food 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 Sentra Food Indonesia are associated (or correlated) with Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Sentra Food i.e., Sentra Food and Mnc Kapital go up and down completely randomly.
Pair Corralation between Sentra Food and Mnc Kapital
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to generate 0.21 times more return on investment than Mnc Kapital. However, Sentra Food Indonesia is 4.84 times less risky than Mnc Kapital. It trades about -0.08 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about -0.14 per unit of risk. If you would invest 11,700 in Sentra Food Indonesia on September 3, 2024 and sell it today you would lose (200.00) from holding Sentra Food Indonesia or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentra Food Indonesia vs. Mnc Kapital Indonesia
Performance |
| Timeline |
| Sentra Food Indonesia |
| Mnc Kapital Indonesia |
Sentra Food and Mnc Kapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Mnc Kapital
The main advantage of trading using opposite Sentra Food and Mnc Kapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Mnc Kapital 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 Mnc Kapital will offset losses from the drop in Mnc Kapital's long position.| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. PT Wahana Interfood | Sentra Food vs. Mitra Pinasthika Mustika | Sentra Food vs. Jakarta Int Hotels |
| Mnc Kapital vs. City Retail Developments | Mnc Kapital vs. Pacific Strategic Financial | Mnc Kapital vs. Dharma Polimetal Tbk | Mnc Kapital vs. Ace Hardware Indonesia |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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