Correlation Between Global Mediacom and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Global Mediacom and Gajah Tunggal 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 Global Mediacom and Gajah Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Mediacom Tbk and Gajah Tunggal Tbk, you can compare the effects of market volatilities on Global Mediacom and Gajah Tunggal 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 Global Mediacom with a short position of Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Mediacom and Gajah Tunggal.
Diversification Opportunities for Global Mediacom and Gajah Tunggal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Gajah is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Global Mediacom Tbk and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal Tbk and Global Mediacom 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 Global Mediacom Tbk are associated (or correlated) with Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Global Mediacom i.e., Global Mediacom and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Global Mediacom and Gajah Tunggal
Assuming the 90 days trading horizon Global Mediacom Tbk is expected to under-perform the Gajah Tunggal. But the stock apears to be less risky and, when comparing its historical volatility, Global Mediacom Tbk is 1.69 times less risky than Gajah Tunggal. The stock trades about -0.04 of its potential returns per unit of risk. The Gajah Tunggal Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 61,333 in Gajah Tunggal Tbk on November 5, 2024 and sell it today you would earn a total of 54,167 from holding Gajah Tunggal Tbk or generate 88.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Global Mediacom Tbk vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Global Mediacom Tbk |
| Gajah Tunggal Tbk |
Global Mediacom and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Mediacom and Gajah Tunggal
The main advantage of trading using opposite Global Mediacom and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Mediacom position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Global Mediacom vs. Media Nusantara Citra | Global Mediacom vs. Mnc Investama Tbk | Global Mediacom vs. Akr Corporindo Tbk | Global Mediacom vs. Ciputra Development Tbk |
| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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