Correlation Between Sumber Alfaria and Sentul City

Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Sentul City 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 Sumber Alfaria and Sentul City into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sumber Alfaria Trijaya and Sentul City Tbk, you can compare the effects of market volatilities on Sumber Alfaria and Sentul City 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 Sumber Alfaria with a short position of Sentul City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Sentul City.

Diversification Opportunities for Sumber Alfaria and Sentul City

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Correlation Coefficient

Sumber Alfaria  Sentul City

Pay attention - limited upside

The 3 months correlation between Sumber and Sentul is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Sentul City Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentul City Tbk and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Sentul City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentul City Tbk has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Sentul City go up and down completely randomly.

Pair Corralation between Sumber Alfaria and Sentul City

If you would invest  0.00  in Sentul City Tbk on February 23, 2024 and sell it today you would earn a total of  0.00  from holding Sentul City Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sumber Alfaria Trijaya  vs.  Sentul City Tbk

Sumber Alfaria Trijaya

Risk-Adjusted Performance

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Modest

Over the last 90 days Sumber Alfaria Trijaya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sumber Alfaria is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Sentul City Tbk

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Sentul City Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sumber Alfaria and Sentul City

The main advantage of trading using opposite Sumber Alfaria and Sentul City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Sentul City 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 Sentul City will offset losses from the drop in Sentul City's long position.

The idea behind Sumber Alfaria Trijaya and Sentul City Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.