Correlation Between Sentra Food and Citatah Tbk
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Citatah Tbk 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 Citatah Tbk 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 Citatah Tbk, you can compare the effects of market volatilities on Sentra Food and Citatah Tbk 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 Citatah Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Citatah Tbk.
Diversification Opportunities for Sentra Food and Citatah Tbk
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentra and Citatah is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Citatah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citatah Tbk 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 Citatah Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citatah Tbk has no effect on the direction of Sentra Food i.e., Sentra Food and Citatah Tbk go up and down completely randomly.
Pair Corralation between Sentra Food and Citatah Tbk
Assuming the 90 days trading horizon Sentra Food is expected to generate 128.0 times less return on investment than Citatah Tbk. But when comparing it to its historical volatility, Sentra Food Indonesia is 2.21 times less risky than Citatah Tbk. It trades about 0.0 of its potential returns per unit of risk. Citatah Tbk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Citatah Tbk on September 19, 2024 and sell it today you would earn a total of 200.00 from holding Citatah Tbk or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentra Food Indonesia vs. Citatah Tbk
Performance |
| Timeline |
| Sentra Food Indonesia |
| Citatah Tbk |
Sentra Food and Citatah Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Citatah Tbk
The main advantage of trading using opposite Sentra Food and Citatah Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Citatah Tbk 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 Citatah Tbk will offset losses from the drop in Citatah Tbk's long position.| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Wijaya Karya Bangunan | Sentra Food vs. Mitrabara Adiperdana PT | Sentra Food vs. PT Multi Garam |
| Citatah Tbk vs. Kedaung Indah Can | Citatah Tbk vs. Kabelindo Murni Tbk | Citatah Tbk vs. Champion Pacific Indonesia | Citatah Tbk vs. Bhuwanatala Indah Permai |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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