Correlation Between Citatah Tbk and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Citatah Tbk 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 Citatah Tbk and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citatah Tbk and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Citatah Tbk 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 Citatah Tbk with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citatah Tbk and Gunawan Dianjaya.
Diversification Opportunities for Citatah Tbk and Gunawan Dianjaya
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citatah and Gunawan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citatah Tbk 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 Citatah 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 Citatah Tbk 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 Citatah Tbk i.e., Citatah Tbk and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Citatah Tbk and Gunawan Dianjaya
Assuming the 90 days trading horizon Citatah Tbk is expected to generate 26.21 times less return on investment than Gunawan Dianjaya. But when comparing it to its historical volatility, Citatah Tbk is 1.84 times less risky than Gunawan Dianjaya. It trades about 0.01 of its potential returns per unit of risk. Gunawan Dianjaya Steel is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 10,100 in Gunawan Dianjaya Steel on September 13, 2024 and sell it today you would earn a total of 1,700 from holding Gunawan Dianjaya Steel or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citatah Tbk vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Citatah Tbk |
| Gunawan Dianjaya Steel |
Citatah Tbk and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citatah Tbk and Gunawan Dianjaya
The main advantage of trading using opposite Citatah Tbk and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citatah Tbk 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.| Citatah Tbk vs. Siloam International Hospitals | Citatah Tbk vs. Weha Transportasi Indonesia | Citatah Tbk vs. Diamond Food Indonesia | Citatah Tbk vs. Metro Healthcare Indonesia |
| Gunawan Dianjaya vs. Kedaung Indah Can | Gunawan Dianjaya vs. Kabelindo Murni Tbk | Gunawan Dianjaya vs. Champion Pacific Indonesia | Gunawan Dianjaya vs. Bhuwanatala Indah Permai |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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