Correlation Between Alkindo Naratama and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Alkindo Naratama and Gunawan Dianjaya 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 Alkindo Naratama and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkindo Naratama Tbk and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Alkindo Naratama and Gunawan Dianjaya 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 Alkindo Naratama with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkindo Naratama and Gunawan Dianjaya.
Diversification Opportunities for Alkindo Naratama and Gunawan Dianjaya
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alkindo and Gunawan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alkindo Naratama Tbk and Gunawan Dianjaya Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunawan Dianjaya Steel and Alkindo Naratama 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 Alkindo Naratama Tbk are associated (or correlated) with Gunawan Dianjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunawan Dianjaya Steel has no effect on the direction of Alkindo Naratama i.e., Alkindo Naratama and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Alkindo Naratama and Gunawan Dianjaya
Assuming the 90 days trading horizon Alkindo Naratama Tbk is expected to under-perform the Gunawan Dianjaya. In addition to that, Alkindo Naratama is 2.87 times more volatile than Gunawan Dianjaya Steel. It trades about -0.29 of its total potential returns per unit of risk. Gunawan Dianjaya Steel is currently generating about -0.42 per unit of volatility. If you would invest 9,800 in Gunawan Dianjaya Steel on November 2, 2024 and sell it today you would lose (700.00) from holding Gunawan Dianjaya Steel or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Alkindo Naratama Tbk vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Alkindo Naratama Tbk |
| Gunawan Dianjaya Steel |
Alkindo Naratama and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkindo Naratama and Gunawan Dianjaya
The main advantage of trading using opposite Alkindo Naratama and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkindo Naratama position performs unexpectedly, Gunawan Dianjaya 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 Gunawan Dianjaya will offset losses from the drop in Gunawan Dianjaya's long position.| Alkindo Naratama vs. Argha Karya Prima | Alkindo Naratama vs. Gunawan Dianjaya Steel | Alkindo Naratama vs. Arwana Citramulia Tbk | Alkindo Naratama vs. Alakasa Industrindo Tbk |
| Gunawan Dianjaya vs. Betonjaya Manunggal Tbk | Gunawan Dianjaya vs. Lotte Chemical Titan | Gunawan Dianjaya vs. Indopoly Swakarsa Industry | Gunawan Dianjaya vs. Saranacentral Bajatama Tbk |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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