Correlation Between Pertamina Geothermal and Sentra Food

Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Sentra Food 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 Pertamina Geothermal and Sentra Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pertamina Geothermal Energy and Sentra Food Indonesia, you can compare the effects of market volatilities on Pertamina Geothermal and Sentra Food 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 Pertamina Geothermal with a short position of Sentra Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Sentra Food.

Diversification Opportunities for Pertamina Geothermal and Sentra Food

-0.49

Correlation Coefficient

Pertamina Geothermal  Sentra Food

Very good diversification

The 3 months correlation between Pertamina and Sentra is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Sentra Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentra Food Indonesia and Pertamina Geothermal 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 Pertamina Geothermal Energy are associated (or correlated) with Sentra Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentra Food Indonesia has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Sentra Food go up and down completely randomly.

Pair Corralation between Pertamina Geothermal and Sentra Food

Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to generate 2.32 times more return on investment than Sentra Food. However, Pertamina Geothermal is 2.32 times more volatile than Sentra Food Indonesia. It trades about 0.23 of its potential returns per unit of risk. Sentra Food Indonesia is currently generating about -0.02 per unit of risk. If you would invest  96,500  in Pertamina Geothermal Energy on April 25, 2025 and sell it today you would earn a total of  67,000  from holding Pertamina Geothermal Energy or generate 69.43% return on investment over 90 days.

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

Pertamina Geothermal Energy  vs.  Sentra Food Indonesia

Pertamina Geothermal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pertamina Geothermal Energy are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pertamina Geothermal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sentra Food Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sentra Food Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Pertamina Geothermal and Sentra Food

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

The idea behind Pertamina Geothermal Energy and Sentra Food Indonesia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.