Correlation Between Asiaplast Industries and Gunung Raja
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Gunung Raja 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 Asiaplast Industries and Gunung Raja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Gunung Raja Paksi, you can compare the effects of market volatilities on Asiaplast Industries and Gunung Raja 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 Asiaplast Industries with a short position of Gunung Raja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Gunung Raja.
Diversification Opportunities for Asiaplast Industries and Gunung Raja
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asiaplast and Gunung is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Gunung Raja Paksi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunung Raja Paksi and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Gunung Raja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunung Raja Paksi has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Gunung Raja go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Gunung Raja
Assuming the 90 days trading horizon Asiaplast Industries is expected to generate 5.02 times less return on investment than Gunung Raja. But when comparing it to its historical volatility, Asiaplast Industries Tbk is 2.33 times less risky than Gunung Raja. It trades about 0.01 of its potential returns per unit of risk. Gunung Raja Paksi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20,679 in Gunung Raja Paksi on September 14, 2024 and sell it today you would earn a total of 521.00 from holding Gunung Raja Paksi or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Gunung Raja Paksi
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Gunung Raja Paksi |
Asiaplast Industries and Gunung Raja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Gunung Raja
The main advantage of trading using opposite Asiaplast Industries and Gunung Raja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Gunung Raja 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 Gunung Raja will offset losses from the drop in Gunung Raja's long position.| Asiaplast Industries vs. Kedaung Indah Can | Asiaplast Industries vs. Kabelindo Murni Tbk | Asiaplast Industries vs. Champion Pacific Indonesia | Asiaplast Industries vs. Bhuwanatala Indah Permai |
| Gunung Raja vs. Alumindo Light Metal | Gunung Raja vs. Duta Pertiwi Nusantara | Gunung Raja vs. Berlina Tbk | Gunung Raja vs. Asiaplast Industries 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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