Correlation Between Sentra Food and PT Wahana
Can any of the company-specific risk be diversified away by investing in both Sentra Food and PT Wahana 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 PT Wahana 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 PT Wahana Interfood, you can compare the effects of market volatilities on Sentra Food and PT Wahana 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 PT Wahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and PT Wahana.
Diversification Opportunities for Sentra Food and PT Wahana
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sentra and COCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and PT Wahana Interfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wahana Interfood 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 PT Wahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wahana Interfood has no effect on the direction of Sentra Food i.e., Sentra Food and PT Wahana go up and down completely randomly.
Pair Corralation between Sentra Food and PT Wahana
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to generate 0.57 times more return on investment than PT Wahana. However, Sentra Food Indonesia is 1.77 times less risky than PT Wahana. It trades about -0.03 of its potential returns per unit of risk. PT Wahana Interfood is currently generating about -0.18 per unit of risk. If you would invest 11,800 in Sentra Food Indonesia on August 30, 2024 and sell it today you would lose (100.00) from holding Sentra Food Indonesia or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentra Food Indonesia vs. PT Wahana Interfood
Performance |
| Timeline |
| Sentra Food Indonesia |
| PT Wahana Interfood |
Sentra Food and PT Wahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and PT Wahana
The main advantage of trading using opposite Sentra Food and PT Wahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, PT Wahana 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 PT Wahana will offset losses from the drop in PT Wahana's long position.| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Estika Tata Tiara | Sentra Food vs. Campina Ice Cream | Sentra Food vs. PT Wahana Interfood |
| PT Wahana vs. Garudafood Putra Putri | PT Wahana vs. Sentra Food Indonesia | PT Wahana vs. Campina Ice Cream | PT Wahana vs. Diamond Food 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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