Correlation Between Bayu Buana and Gema Grahasarana
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Gema Grahasarana 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 Bayu Buana and Gema Grahasarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayu Buana Tbk and Gema Grahasarana Tbk, you can compare the effects of market volatilities on Bayu Buana and Gema Grahasarana 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 Bayu Buana with a short position of Gema Grahasarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Gema Grahasarana.
Diversification Opportunities for Bayu Buana and Gema Grahasarana
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bayu and Gema is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Gema Grahasarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gema Grahasarana Tbk and Bayu Buana 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 Bayu Buana Tbk are associated (or correlated) with Gema Grahasarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gema Grahasarana Tbk has no effect on the direction of Bayu Buana i.e., Bayu Buana and Gema Grahasarana go up and down completely randomly.
Pair Corralation between Bayu Buana and Gema Grahasarana
Assuming the 90 days trading horizon Bayu Buana is expected to generate 3.35 times less return on investment than Gema Grahasarana. But when comparing it to its historical volatility, Bayu Buana Tbk is 1.98 times less risky than Gema Grahasarana. It trades about 0.01 of its potential returns per unit of risk. Gema Grahasarana Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 23,375 in Gema Grahasarana Tbk on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Gema Grahasarana Tbk or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Gema Grahasarana Tbk
Performance |
| Timeline |
| Bayu Buana Tbk |
| Gema Grahasarana Tbk |
Bayu Buana and Gema Grahasarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Gema Grahasarana
The main advantage of trading using opposite Bayu Buana and Gema Grahasarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Gema Grahasarana 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 Gema Grahasarana will offset losses from the drop in Gema Grahasarana's long position.| Bayu Buana vs. Akbar Indomakmur Stimec | Bayu Buana vs. Mahaka Media Tbk | Bayu Buana vs. Fortune Indonesia Tbk | Bayu Buana vs. Gema Grahasarana Tbk |
| Gema Grahasarana vs. Fortune Indonesia Tbk | Gema Grahasarana vs. Fks Multi Agro | Gema Grahasarana vs. Bayu Buana Tbk | Gema Grahasarana vs. Fast Food Indonesia |
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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