Correlation Between Berlina Tbk and Gunung Raja
Can any of the company-specific risk be diversified away by investing in both Berlina Tbk 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 Berlina Tbk and Gunung Raja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berlina Tbk and Gunung Raja Paksi, you can compare the effects of market volatilities on Berlina Tbk 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 Berlina Tbk with a short position of Gunung Raja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berlina Tbk and Gunung Raja.
Diversification Opportunities for Berlina Tbk and Gunung Raja
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berlina and Gunung is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Berlina 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 Berlina Tbk 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 Berlina 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 Berlina Tbk i.e., Berlina Tbk and Gunung Raja go up and down completely randomly.
Pair Corralation between Berlina Tbk and Gunung Raja
Assuming the 90 days trading horizon Berlina Tbk is expected to under-perform the Gunung Raja. But the stock apears to be less risky and, when comparing its historical volatility, Berlina Tbk is 2.07 times less risky than Gunung Raja. The stock trades about -0.01 of its potential returns per unit of risk. The 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berlina Tbk vs. Gunung Raja Paksi
Performance |
| Timeline |
| Berlina Tbk |
| Gunung Raja Paksi |
Berlina Tbk and Gunung Raja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berlina Tbk and Gunung Raja
The main advantage of trading using opposite Berlina Tbk and Gunung Raja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berlina Tbk 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.| Berlina Tbk vs. Argha Karya Prima | Berlina Tbk vs. Asiaplast Industries Tbk | Berlina Tbk vs. Betonjaya Manunggal Tbk | Berlina Tbk vs. Champion Pacific Indonesia |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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