Correlation Between Sentul City and Asiaplast Industries
Can any of the company-specific risk be diversified away by investing in both Sentul City and Asiaplast Industries 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 Sentul City and Asiaplast Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentul City Tbk and Asiaplast Industries Tbk, you can compare the effects of market volatilities on Sentul City and Asiaplast Industries 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 Sentul City with a short position of Asiaplast Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentul City and Asiaplast Industries.
Diversification Opportunities for Sentul City and Asiaplast Industries
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sentul and Asiaplast is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sentul City Tbk and Asiaplast Industries Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiaplast Industries Tbk and Sentul City 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 Sentul City Tbk are associated (or correlated) with Asiaplast Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiaplast Industries Tbk has no effect on the direction of Sentul City i.e., Sentul City and Asiaplast Industries go up and down completely randomly.
Pair Corralation between Sentul City and Asiaplast Industries
Assuming the 90 days trading horizon Sentul City Tbk is expected to under-perform the Asiaplast Industries. In addition to that, Sentul City is 2.2 times more volatile than Asiaplast Industries Tbk. It trades about -0.18 of its total potential returns per unit of risk. Asiaplast Industries Tbk is currently generating about 0.01 per unit of volatility. If you would invest 59,936 in Asiaplast Industries Tbk on March 31, 2024 and sell it today you would earn a total of 64.00 from holding Asiaplast Industries Tbk or generate 0.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sentul City Tbk vs. Asiaplast Industries Tbk
Performance |
Timeline |
Sentul City Tbk |
Asiaplast Industries Tbk |
Sentul City and Asiaplast Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sentul City and Asiaplast Industries
The main advantage of trading using opposite Sentul City and Asiaplast Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentul City position performs unexpectedly, Asiaplast Industries 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 Asiaplast Industries will offset losses from the drop in Asiaplast Industries' long position.Sentul City vs. Asiaplast Industries Tbk | Sentul City vs. Argha Karya Prima | Sentul City vs. Alumindo Light Metal | Sentul City vs. Asahimas Flat Glass |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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