Correlation Between Sentra Food and Hotel Fitra
Can any of the company-specific risk be diversified away by investing in both Sentra Food and Hotel Fitra 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 Sentra Food and Hotel Fitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentra Food Indonesia and Hotel Fitra International, you can compare the effects of market volatilities on Sentra Food and Hotel Fitra 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 Sentra Food with a short position of Hotel Fitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Hotel Fitra.
Diversification Opportunities for Sentra Food and Hotel Fitra
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sentra and Hotel is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Hotel Fitra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Fitra International and Sentra Food 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 Sentra Food Indonesia are associated (or correlated) with Hotel Fitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Fitra International has no effect on the direction of Sentra Food i.e., Sentra Food and Hotel Fitra go up and down completely randomly.
Pair Corralation between Sentra Food and Hotel Fitra
Assuming the 90 days trading horizon Sentra Food Indonesia is expected to under-perform the Hotel Fitra. But the stock apears to be less risky and, when comparing its historical volatility, Sentra Food Indonesia is 1.37 times less risky than Hotel Fitra. The stock trades about -0.01 of its potential returns per unit of risk. The Hotel Fitra International is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,600 in Hotel Fitra International on December 1, 2024 and sell it today you would earn a total of 1,800 from holding Hotel Fitra International or generate 18.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sentra Food Indonesia vs. Hotel Fitra International
Performance |
Timeline |
Sentra Food Indonesia |
Hotel Fitra International |
Sentra Food and Hotel Fitra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sentra Food and Hotel Fitra
The main advantage of trading using opposite Sentra Food and Hotel Fitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Hotel Fitra 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 Hotel Fitra will offset losses from the drop in Hotel Fitra's long position.Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Estika Tata Tiara | Sentra Food vs. Campina Ice Cream | Sentra Food vs. PT Wahana Interfood |
Hotel Fitra vs. Eastparc Hotel Tbk | Hotel Fitra vs. Menteng Heritage Realty | Hotel Fitra vs. Sanurhasta Mitra PT | Hotel Fitra vs. Sentra Food Indonesia |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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