Correlation Between Solusi Bangun and Sentul City

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Can any of the company-specific risk be diversified away by investing in both Solusi Bangun 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 Solusi Bangun and Sentul City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solusi Bangun Indonesia and Sentul City Tbk, you can compare the effects of market volatilities on Solusi Bangun 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 Solusi Bangun with a short position of Sentul City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solusi Bangun and Sentul City.

Diversification Opportunities for Solusi Bangun and Sentul City

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Solusi and Sentul is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Solusi Bangun Indonesia 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 Solusi Bangun 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 Solusi Bangun Indonesia 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 Solusi Bangun i.e., Solusi Bangun and Sentul City go up and down completely randomly.

Pair Corralation between Solusi Bangun and Sentul City

Assuming the 90 days trading horizon Solusi Bangun is expected to generate 1.27 times less return on investment than Sentul City. In addition to that, Solusi Bangun is 1.16 times more volatile than Sentul City Tbk. It trades about 0.06 of its total potential returns per unit of risk. Sentul City Tbk is currently generating about 0.09 per unit of volatility. If you would invest  4,200  in Sentul City Tbk on September 1, 2024 and sell it today you would earn a total of  600.00  from holding Sentul City Tbk or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Solusi Bangun Indonesia  vs.  Sentul City Tbk

 Performance 
       Timeline  
Solusi Bangun Indonesia 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Solusi Bangun Indonesia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Solusi Bangun may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Sentul City Tbk 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sentul City Tbk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sentul City disclosed solid returns over the last few months and may actually be approaching a breakup point.

Solusi Bangun and Sentul City Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Solusi Bangun and Sentul City

The main advantage of trading using opposite Solusi Bangun and Sentul City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solusi Bangun 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 Solusi Bangun Indonesia 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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