Correlation Between Hensel Davest and Sentral Mitra
Can any of the company-specific risk be diversified away by investing in both Hensel Davest and Sentral Mitra 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 Hensel Davest and Sentral Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hensel Davest Indonesia and Sentral Mitra Informatika, you can compare the effects of market volatilities on Hensel Davest and Sentral Mitra 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 Hensel Davest with a short position of Sentral Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hensel Davest and Sentral Mitra.
Diversification Opportunities for Hensel Davest and Sentral Mitra
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hensel and Sentral is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hensel Davest Indonesia and Sentral Mitra Informatika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentral Mitra Informatika and Hensel Davest 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 Hensel Davest Indonesia are associated (or correlated) with Sentral Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentral Mitra Informatika has no effect on the direction of Hensel Davest i.e., Hensel Davest and Sentral Mitra go up and down completely randomly.
Pair Corralation between Hensel Davest and Sentral Mitra
Assuming the 90 days trading horizon Hensel Davest Indonesia is expected to generate 14.12 times more return on investment than Sentral Mitra. However, Hensel Davest is 14.12 times more volatile than Sentral Mitra Informatika. It trades about 0.04 of its potential returns per unit of risk. Sentral Mitra Informatika is currently generating about -0.03 per unit of risk. If you would invest 6,400 in Hensel Davest Indonesia on September 3, 2024 and sell it today you would lose (4,900) from holding Hensel Davest Indonesia or give up 76.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hensel Davest Indonesia vs. Sentral Mitra Informatika
Performance |
| Timeline |
| Hensel Davest Indonesia |
| Sentral Mitra Informatika |
Hensel Davest and Sentral Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hensel Davest and Sentral Mitra
The main advantage of trading using opposite Hensel Davest and Sentral Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hensel Davest position performs unexpectedly, Sentral Mitra 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 Sentral Mitra will offset losses from the drop in Sentral Mitra's long position.| Hensel Davest vs. Kioson Komersial Indonesia | Hensel Davest vs. Sentral Mitra Informatika | Hensel Davest vs. Multipolar Technology Tbk | Hensel Davest vs. Nusantara Voucher Distribution |
| Sentral Mitra vs. Kioson Komersial Indonesia | Sentral Mitra vs. Multipolar Technology Tbk | Sentral Mitra vs. Hensel Davest Indonesia | Sentral Mitra vs. NFC Indonesia PT |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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