Correlation Between Visa and Sentral Mitra
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Sentral Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Sentral Mitra Informatika, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Sentral Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sentral Mitra.
Diversification Opportunities for Visa and Sentral Mitra
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Sentral is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Sentral Mitra go up and down completely randomly.
Pair Corralation between Visa and Sentral Mitra
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.31 times more return on investment than Sentral Mitra. However, Visa Class A is 3.22 times less risky than Sentral Mitra. It trades about 0.09 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 20,975 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 10,533 from holding Visa Class A or generate 50.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.56% |
| Values | Daily Returns |
Visa Class A vs. Sentral Mitra Informatika
Performance |
| Timeline |
| Visa Class A |
| Sentral Mitra Informatika |
Visa and Sentral Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Sentral Mitra
The main advantage of trading using opposite Visa and Sentral Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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