Correlation Between Sentra Food and Menteng Heritage
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Menteng Heritage 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 Menteng Heritage 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 Menteng Heritage Realty, you can compare the effects of market volatilities on Sentra Food and Menteng Heritage 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 Menteng Heritage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Menteng Heritage.
Diversification Opportunities for Sentra Food and Menteng Heritage
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sentra and Menteng is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Menteng Heritage Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menteng Heritage Realty 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 Menteng Heritage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menteng Heritage Realty has no effect on the direction of Sentra Food i.e., Sentra Food and Menteng Heritage go up and down completely randomly.
Pair Corralation between Sentra Food and Menteng Heritage
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to generate 1.53 times more return on investment than Menteng Heritage. However, Sentra Food is 1.53 times more volatile than Menteng Heritage Realty. It trades about 0.02 of its potential returns per unit of risk. Menteng Heritage Realty is currently generating about 0.0 per unit of risk. If you would invest 12,300 in Sentra Food Indonesia on September 14, 2024 and sell it today you would lose (600.00) from holding Sentra Food Indonesia or give up 4.88% 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. Menteng Heritage Realty
Performance |
| Timeline |
| Sentra Food Indonesia |
| Menteng Heritage Realty |
Sentra Food and Menteng Heritage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Menteng Heritage
The main advantage of trading using opposite Sentra Food and Menteng Heritage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Menteng Heritage 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 Menteng Heritage will offset losses from the drop in Menteng Heritage'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 |
| Menteng Heritage vs. Sanurhasta Mitra PT | Menteng Heritage vs. Sentra Food Indonesia | Menteng Heritage vs. Yelooo Integra Datanet |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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