Correlation Between Sentra Food and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Mitrabara Adiperdana 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT, you can compare the effects of market volatilities on Sentra Food and Mitrabara Adiperdana 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 Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Mitrabara Adiperdana.
Diversification Opportunities for Sentra Food and Mitrabara Adiperdana
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sentra and Mitrabara is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana 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 Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of Sentra Food i.e., Sentra Food and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between Sentra Food and Mitrabara Adiperdana
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to generate 1.86 times more return on investment than Mitrabara Adiperdana. However, Sentra Food is 1.86 times more volatile than Mitrabara Adiperdana PT. It trades about 0.02 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.09 per unit of risk. If you would invest 11,400 in Sentra Food Indonesia on January 15, 2025 and sell it today you would lose (600.00) from holding Sentra Food Indonesia or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentra Food Indonesia vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| Sentra Food Indonesia |
| Mitrabara Adiperdana |
Sentra Food and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Mitrabara Adiperdana
The main advantage of trading using opposite Sentra Food and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana'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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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