Correlation Between Sentra Food and Repower Asia
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Repower Asia 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 Repower Asia 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 Repower Asia Indonesia, you can compare the effects of market volatilities on Sentra Food and Repower Asia 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 Repower Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Repower Asia.
Diversification Opportunities for Sentra Food and Repower Asia
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sentra and Repower is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Repower Asia Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repower Asia Indonesia 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 Repower Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repower Asia Indonesia has no effect on the direction of Sentra Food i.e., Sentra Food and Repower Asia go up and down completely randomly.
Pair Corralation between Sentra Food and Repower Asia
Assuming the 90 days trading horizon Sentra Food is expected to generate 15.32 times less return on investment than Repower Asia. But when comparing it to its historical volatility, Sentra Food Indonesia is 8.64 times less risky than Repower Asia. It trades about 0.11 of its potential returns per unit of risk. Repower Asia Indonesia is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Repower Asia Indonesia on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Repower Asia Indonesia or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentra Food Indonesia vs. Repower Asia Indonesia
Performance |
| Timeline |
| Sentra Food Indonesia |
| Repower Asia Indonesia |
Sentra Food and Repower Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Repower Asia
The main advantage of trading using opposite Sentra Food and Repower Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Repower Asia 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 Repower Asia will offset losses from the drop in Repower Asia'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 |
| Repower Asia vs. Perintis Triniti Properti | Repower Asia vs. Diamond Citra Propertindo | Repower Asia vs. Karya Bersama Anugerah | Repower Asia vs. Pratama Widya Tbk |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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