Correlation Between Sentra Food and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Bank Nationalnobu 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 Bank Nationalnobu 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 Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Sentra Food and Bank Nationalnobu 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 Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Bank Nationalnobu.
Diversification Opportunities for Sentra Food and Bank Nationalnobu
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentra and Bank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu 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 Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Sentra Food i.e., Sentra Food and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Sentra Food and Bank Nationalnobu
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to generate 0.18 times more return on investment than Bank Nationalnobu. However, Sentra Food Indonesia is 5.6 times less risky than Bank Nationalnobu. It trades about 0.0 of its potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about -0.02 per unit of risk. If you would invest 11,600 in Sentra Food Indonesia on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Sentra Food Indonesia or generate 0.0% 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. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Sentra Food Indonesia |
| Bank Nationalnobu Tbk |
Sentra Food and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Bank Nationalnobu
The main advantage of trading using opposite Sentra Food and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu's long position.| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Campina Ice Cream | Sentra Food vs. PT Wahana Interfood | Sentra Food vs. Era Mandiri Cemerlang |
| Bank Nationalnobu vs. Indofood Cbp Sukses | Bank Nationalnobu vs. Gunawan Dianjaya Steel | Bank Nationalnobu vs. Panin Financial Tbk | Bank Nationalnobu vs. Sentra 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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