Correlation Between Advanced Drainage and PT Gajah
Can any of the company-specific risk be diversified away by investing in both Advanced Drainage and PT Gajah 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 Advanced Drainage and PT Gajah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Drainage Systems and PT Gajah Tunggal, you can compare the effects of market volatilities on Advanced Drainage and PT Gajah 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 Advanced Drainage with a short position of PT Gajah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Drainage and PT Gajah.
Diversification Opportunities for Advanced Drainage and PT Gajah
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and GH8 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Drainage Systems and PT Gajah Tunggal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gajah Tunggal and Advanced Drainage 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 Advanced Drainage Systems are associated (or correlated) with PT Gajah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gajah Tunggal has no effect on the direction of Advanced Drainage i.e., Advanced Drainage and PT Gajah go up and down completely randomly.
Pair Corralation between Advanced Drainage and PT Gajah
Assuming the 90 days horizon Advanced Drainage Systems is expected to generate 0.3 times more return on investment than PT Gajah. However, Advanced Drainage Systems is 3.3 times less risky than PT Gajah. It trades about -0.03 of its potential returns per unit of risk. PT Gajah Tunggal is currently generating about -0.03 per unit of risk. If you would invest 10,975 in Advanced Drainage Systems on December 11, 2024 and sell it today you would lose (370.00) from holding Advanced Drainage Systems or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Drainage Systems vs. PT Gajah Tunggal
Performance |
| Timeline |
| Advanced Drainage Systems |
| PT Gajah Tunggal |
Advanced Drainage and PT Gajah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Drainage and PT Gajah
The main advantage of trading using opposite Advanced Drainage and PT Gajah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Drainage position performs unexpectedly, PT Gajah 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 PT Gajah will offset losses from the drop in PT Gajah's long position.| Advanced Drainage vs. Meiko Electronics Co | Advanced Drainage vs. BioNTech SE | Advanced Drainage vs. LG Electronics | Advanced Drainage vs. VELA TECHNOLPLC LS 0001 |
| PT Gajah vs. Information Services International Dentsu | PT Gajah vs. Emperor Entertainment Hotel | PT Gajah vs. PPHE HOTEL GROUP | PT Gajah vs. Linedata Services SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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