Correlation Between Pacific Strategic and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic 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 Pacific Strategic and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Strategic Financial and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Pacific Strategic 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 Pacific Strategic with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Gunawan Dianjaya.
Diversification Opportunities for Pacific Strategic and Gunawan Dianjaya
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pacific and Gunawan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial 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 Pacific Strategic 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 Pacific Strategic Financial 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 Pacific Strategic i.e., Pacific Strategic and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Pacific Strategic and Gunawan Dianjaya
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to generate 0.21 times more return on investment than Gunawan Dianjaya. However, Pacific Strategic Financial is 4.8 times less risky than Gunawan Dianjaya. It trades about -0.24 of its potential returns per unit of risk. Gunawan Dianjaya Steel is currently generating about -0.28 per unit of risk. If you would invest 106,000 in Pacific Strategic Financial on August 31, 2024 and sell it today you would lose (4,500) from holding Pacific Strategic Financial or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Pacific Strategic |
| Gunawan Dianjaya Steel |
Pacific Strategic and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Gunawan Dianjaya
The main advantage of trading using opposite Pacific Strategic and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic 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.| Pacific Strategic vs. Bank BRISyariah Tbk | Pacific Strategic vs. Ace Hardware Indonesia | Pacific Strategic vs. Merdeka Copper Gold | Pacific Strategic vs. Mitra Pinasthika Mustika |
| Gunawan Dianjaya vs. Perusahaan Gas Negara | Gunawan Dianjaya vs. Vale Indonesia Tbk | Gunawan Dianjaya vs. Telkom Indonesia Tbk | Gunawan Dianjaya vs. Mitra Pinasthika Mustika |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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