Correlation Between First Media and Sentra Food
Can any of the company-specific risk be diversified away by investing in both First Media 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 First Media and Sentra Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and Sentra Food Indonesia, you can compare the effects of market volatilities on First Media 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 First Media with a short position of Sentra Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and Sentra Food.
Diversification Opportunities for First Media and Sentra Food
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Sentra is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk 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 First Media 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 First Media Tbk 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 First Media i.e., First Media and Sentra Food go up and down completely randomly.
Pair Corralation between First Media and Sentra Food
Assuming the 90 days trading horizon First Media Tbk is expected to generate 1.31 times more return on investment than Sentra Food. However, First Media is 1.31 times more volatile than Sentra Food Indonesia. It trades about 0.27 of its potential returns per unit of risk. Sentra Food Indonesia is currently generating about 0.0 per unit of risk. If you would invest 3,200 in First Media Tbk on September 1, 2024 and sell it today you would earn a total of 6,500 from holding First Media Tbk or generate 203.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Media Tbk vs. Sentra Food Indonesia
Performance |
| Timeline |
| First Media Tbk |
| Sentra Food Indonesia |
First Media and Sentra Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and Sentra Food
The main advantage of trading using opposite First Media and Sentra Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media 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.| First Media vs. Indosat Tbk | First Media vs. XL Axiata Tbk | First Media vs. Energi Mega Persada | First Media vs. Bakrie Brothers Tbk |
| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Estika Tata Tiara | Sentra Food vs. Campina Ice Cream | Sentra Food vs. PT Wahana Interfood |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |