Correlation Between Charoen Pokphand and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Gunawan Dianjaya 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 Charoen Pokphand and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Indonesia and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Charoen Pokphand and Gunawan Dianjaya 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 Charoen Pokphand with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Gunawan Dianjaya.
Diversification Opportunities for Charoen Pokphand and Gunawan Dianjaya
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charoen and Gunawan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Gunawan Dianjaya Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunawan Dianjaya Steel and Charoen Pokphand 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 Charoen Pokphand Indonesia are associated (or correlated) with Gunawan Dianjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunawan Dianjaya Steel has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Gunawan Dianjaya
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to under-perform the Gunawan Dianjaya. But the stock apears to be less risky and, when comparing its historical volatility, Charoen Pokphand Indonesia is 1.91 times less risky than Gunawan Dianjaya. The stock trades about -0.04 of its potential returns per unit of risk. The Gunawan Dianjaya Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 9,776 in Gunawan Dianjaya Steel on September 1, 2024 and sell it today you would lose (776.00) from holding Gunawan Dianjaya Steel or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Gunawan Dianjaya Steel |
Charoen Pokphand and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Gunawan Dianjaya
The main advantage of trading using opposite Charoen Pokphand and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Gunawan Dianjaya 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 Gunawan Dianjaya will offset losses from the drop in Gunawan Dianjaya's long position.| Charoen Pokphand vs. Japfa Comfeed Indonesia | Charoen Pokphand vs. Kalbe Farma Tbk | Charoen Pokphand vs. PT Indofood Sukses | Charoen Pokphand vs. Semen Indonesia Persero |
| Gunawan Dianjaya vs. Perusahaan Gas Negara | Gunawan Dianjaya vs. Telkom Indonesia Tbk | Gunawan Dianjaya vs. Mitra Pinasthika Mustika | Gunawan Dianjaya vs. Jakarta Int Hotels |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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