Correlation Between Alam Sutera and Gudang Garam
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Gudang Garam 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 Alam Sutera and Gudang Garam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Gudang Garam Tbk, you can compare the effects of market volatilities on Alam Sutera and Gudang Garam 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 Alam Sutera with a short position of Gudang Garam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Gudang Garam.
Diversification Opportunities for Alam Sutera and Gudang Garam
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alam and Gudang is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Gudang Garam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudang Garam Tbk and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Gudang Garam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudang Garam Tbk has no effect on the direction of Alam Sutera i.e., Alam Sutera and Gudang Garam go up and down completely randomly.
Pair Corralation between Alam Sutera and Gudang Garam
Assuming the 90 days trading horizon Alam Sutera Realty is expected to generate 2.08 times more return on investment than Gudang Garam. However, Alam Sutera is 2.08 times more volatile than Gudang Garam Tbk. It trades about 0.0 of its potential returns per unit of risk. Gudang Garam Tbk is currently generating about -0.16 per unit of risk. If you would invest 15,700 in Alam Sutera Realty on November 5, 2024 and sell it today you would lose (1,400) from holding Alam Sutera Realty or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Gudang Garam Tbk
Performance |
| Timeline |
| Alam Sutera Realty |
| Gudang Garam Tbk |
Alam Sutera and Gudang Garam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Gudang Garam
The main advantage of trading using opposite Alam Sutera and Gudang Garam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Gudang Garam 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 Gudang Garam will offset losses from the drop in Gudang Garam's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Gudang Garam vs. Hanjaya Mandala Sampoerna | Gudang Garam vs. Unilever Indonesia Tbk | Gudang Garam vs. PT Indofood Sukses | Gudang Garam vs. United Tractors 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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