Correlation Between Buyung Poetra and Sentra Food
Can any of the company-specific risk be diversified away by investing in both Buyung Poetra and Sentra Food 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 Buyung Poetra and Sentra Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buyung Poetra Sembada and Sentra Food Indonesia, you can compare the effects of market volatilities on Buyung Poetra and Sentra Food 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 Buyung Poetra with a short position of Sentra Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buyung Poetra and Sentra Food.
Diversification Opportunities for Buyung Poetra and Sentra Food
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Buyung and Sentra is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Buyung Poetra Sembada and Sentra Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentra Food Indonesia and Buyung Poetra 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 Buyung Poetra Sembada are associated (or correlated) with Sentra Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentra Food Indonesia has no effect on the direction of Buyung Poetra i.e., Buyung Poetra and Sentra Food go up and down completely randomly.
Pair Corralation between Buyung Poetra and Sentra Food
Assuming the 90 days trading horizon Buyung Poetra Sembada is expected to generate 5.09 times more return on investment than Sentra Food. However, Buyung Poetra is 5.09 times more volatile than Sentra Food Indonesia. It trades about 0.04 of its potential returns per unit of risk. Sentra Food Indonesia is currently generating about -0.14 per unit of risk. If you would invest 11,900 in Buyung Poetra Sembada on August 25, 2024 and sell it today you would earn a total of 200.00 from holding Buyung Poetra Sembada or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Buyung Poetra Sembada vs. Sentra Food Indonesia
Performance |
| Timeline |
| Buyung Poetra Sembada |
| Sentra Food Indonesia |
Buyung Poetra and Sentra Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buyung Poetra and Sentra Food
The main advantage of trading using opposite Buyung Poetra and Sentra Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buyung Poetra position performs unexpectedly, Sentra Food 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 Sentra Food will offset losses from the drop in Sentra Food's long position.| Buyung Poetra vs. Charoen Pokphand Indonesia | Buyung Poetra vs. Kalbe Farma Tbk | Buyung Poetra vs. Indofood Cbp Sukses | Buyung Poetra vs. Akr Corporindo Tbk |
| Sentra Food vs. Buyung Poetra Sembada | Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Campina Ice Cream | Sentra Food vs. Wijaya Karya Bangunan |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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