Correlation Between Sentra Food and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Weha Transportasi 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 Weha Transportasi 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 Weha Transportasi Indonesia, you can compare the effects of market volatilities on Sentra Food and Weha Transportasi 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 Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Weha Transportasi.
Diversification Opportunities for Sentra Food and Weha Transportasi
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sentra and Weha is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi 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 Weha Transportasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weha Transportasi has no effect on the direction of Sentra Food i.e., Sentra Food and Weha Transportasi go up and down completely randomly.
Pair Corralation between Sentra Food and Weha Transportasi
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to under-perform the Weha Transportasi. In addition to that, Sentra Food is 1.29 times more volatile than Weha Transportasi Indonesia. It trades about 0.0 of its total potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about 0.09 per unit of volatility. If you would invest 9,938 in Weha Transportasi Indonesia on September 1, 2024 and sell it today you would earn a total of 2,362 from holding Weha Transportasi Indonesia or generate 23.77% 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. Weha Transportasi Indonesia
Performance |
| Timeline |
| Sentra Food Indonesia |
| Weha Transportasi |
Sentra Food and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentra Food and Weha Transportasi
The main advantage of trading using opposite Sentra Food and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Weha Transportasi 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 Weha Transportasi will offset losses from the drop in Weha Transportasi'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 |
| Weha Transportasi vs. PT Temas Tbk | Weha Transportasi vs. Dosni Roha Indonesia | Weha Transportasi vs. Rig Tenders Tbk | Weha Transportasi vs. Samudera Indonesia 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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