Correlation Between Mitra Pinasthika and Sentul City

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

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

Diversification Opportunities for Mitra Pinasthika and Sentul City

-0.57

Correlation Coefficient

Mitra Pinasthika  Sentul City

Excellent diversification

The 3 months correlation between Mitra and Sentul is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika 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 Mitra Pinasthika 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 Mitra Pinasthika Mustika 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 Mitra Pinasthika i.e., Mitra Pinasthika and Sentul City go up and down completely randomly.

Pair Corralation between Mitra Pinasthika and Sentul City

Assuming the 90 days trading horizon Mitra Pinasthika is expected to generate 12.91 times less return on investment than Sentul City. But when comparing it to its historical volatility, Mitra Pinasthika Mustika is 5.63 times less risky than Sentul City. It trades about 0.01 of its potential returns per unit of risk. Sentul City Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,100  in Sentul City Tbk on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Sentul City Tbk or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mitra Pinasthika Mustika  vs.  Sentul City Tbk

Mitra Pinasthika Mustika

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitra Pinasthika Mustika are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Mitra Pinasthika is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sentul City Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sentul City Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sentul City may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mitra Pinasthika and Sentul City

The main advantage of trading using opposite Mitra Pinasthika and Sentul City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika 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 Mitra Pinasthika Mustika 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.