Correlation Between Graha Layar and Pudjiadi Sons
Can any of the company-specific risk be diversified away by investing in both Graha Layar and Pudjiadi Sons 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 Graha Layar and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graha Layar Prima and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Graha Layar and Pudjiadi Sons 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 Graha Layar with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graha Layar and Pudjiadi Sons.
Diversification Opportunities for Graha Layar and Pudjiadi Sons
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Graha and Pudjiadi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Graha Layar Prima and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and Graha Layar 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 Graha Layar Prima are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Graha Layar i.e., Graha Layar and Pudjiadi Sons go up and down completely randomly.
Pair Corralation between Graha Layar and Pudjiadi Sons
Assuming the 90 days trading horizon Graha Layar is expected to generate 12.62 times less return on investment than Pudjiadi Sons. But when comparing it to its historical volatility, Graha Layar Prima is 1.63 times less risky than Pudjiadi Sons. It trades about 0.02 of its potential returns per unit of risk. Pudjiadi Sons Tbk is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 44,800 in Pudjiadi Sons Tbk on August 30, 2024 and sell it today you would earn a total of 91,200 from holding Pudjiadi Sons Tbk or generate 203.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graha Layar Prima vs. Pudjiadi Sons Tbk
Performance |
| Timeline |
| Graha Layar Prima |
| Pudjiadi Sons Tbk |
Graha Layar and Pudjiadi Sons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graha Layar and Pudjiadi Sons
The main advantage of trading using opposite Graha Layar and Pudjiadi Sons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graha Layar position performs unexpectedly, Pudjiadi Sons 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 Pudjiadi Sons will offset losses from the drop in Pudjiadi Sons' long position.| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo Tbk |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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