Correlation Between Sentral Mitra and Optima Prima
Can any of the company-specific risk be diversified away by investing in both Sentral Mitra and Optima Prima 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 Sentral Mitra and Optima Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentral Mitra Informatika and Optima Prima Metal, you can compare the effects of market volatilities on Sentral Mitra and Optima Prima 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 Sentral Mitra with a short position of Optima Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentral Mitra and Optima Prima.
Diversification Opportunities for Sentral Mitra and Optima Prima
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sentral and Optima is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sentral Mitra Informatika and Optima Prima Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Prima Metal and Sentral Mitra 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 Sentral Mitra Informatika are associated (or correlated) with Optima Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Prima Metal has no effect on the direction of Sentral Mitra i.e., Sentral Mitra and Optima Prima go up and down completely randomly.
Pair Corralation between Sentral Mitra and Optima Prima
Assuming the 90 days trading horizon Sentral Mitra Informatika is expected to generate 2.46 times more return on investment than Optima Prima. However, Sentral Mitra is 2.46 times more volatile than Optima Prima Metal. It trades about 0.03 of its potential returns per unit of risk. Optima Prima Metal is currently generating about 0.01 per unit of risk. If you would invest 6,400 in Sentral Mitra Informatika on December 2, 2024 and sell it today you would earn a total of 200.00 from holding Sentral Mitra Informatika or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sentral Mitra Informatika vs. Optima Prima Metal
Performance |
Timeline |
Sentral Mitra Informatika |
Optima Prima Metal |
Sentral Mitra and Optima Prima Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sentral Mitra and Optima Prima
The main advantage of trading using opposite Sentral Mitra and Optima Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentral Mitra position performs unexpectedly, Optima Prima 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 Optima Prima will offset losses from the drop in Optima Prima's long position.Sentral Mitra vs. Kioson Komersial Indonesia | Sentral Mitra vs. Multipolar Technology Tbk | Sentral Mitra vs. Hensel Davest Indonesia | Sentral Mitra vs. NFC Indonesia PT |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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