Correlation Between Sentra Food and Trinitan Metals

Can any of the company-specific risk be diversified away by investing in both Sentra Food and Trinitan Metals 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 Trinitan Metals 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 Trinitan Metals and, you can compare the effects of market volatilities on Sentra Food and Trinitan Metals 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 Trinitan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentra Food and Trinitan Metals.

Diversification Opportunities for Sentra Food and Trinitan Metals

0.0

Correlation Coefficient

Sentra Food  Trinitan Metals

Pay attention - limited upside

The 3 months correlation between Sentra and Trinitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sentra Food Indonesia and Trinitan Metals and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinitan Metals 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 Trinitan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinitan Metals has no effect on the direction of Sentra Food i.e., Sentra Food and Trinitan Metals go up and down completely randomly.

Pair Corralation between Sentra Food and Trinitan Metals

If you would invest  11,600  in Sentra Food Indonesia on August 30, 2024 and sell it today you would earn a total of  100.00  from holding Sentra Food Indonesia or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sentra Food Indonesia  vs.  Trinitan Metals and

Sentra Food Indonesia

Risk-Adjusted Performance

1 of 100

Weak

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

Trinitan Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trinitan Metals and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Trinitan Metals is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sentra Food and Trinitan Metals

The main advantage of trading using opposite Sentra Food and Trinitan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentra Food position performs unexpectedly, Trinitan Metals 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 Trinitan Metals will offset losses from the drop in Trinitan Metals' long position.

The idea behind Sentra Food Indonesia and Trinitan Metals and 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.