Correlation Between Gunawan Dianjaya and Gunung Raja
Can any of the company-specific risk be diversified away by investing in both Gunawan Dianjaya 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 Gunawan Dianjaya and Gunung Raja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gunawan Dianjaya Steel and Gunung Raja Paksi, you can compare the effects of market volatilities on Gunawan Dianjaya 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 Gunawan Dianjaya with a short position of Gunung Raja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunawan Dianjaya and Gunung Raja.
Diversification Opportunities for Gunawan Dianjaya and Gunung Raja
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gunawan and Gunung is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gunawan Dianjaya Steel 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 Gunawan Dianjaya 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 Gunawan Dianjaya Steel 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 Gunawan Dianjaya i.e., Gunawan Dianjaya and Gunung Raja go up and down completely randomly.
Pair Corralation between Gunawan Dianjaya and Gunung Raja
Assuming the 90 days trading horizon Gunawan Dianjaya Steel is expected to under-perform the Gunung Raja. But the stock apears to be less risky and, when comparing its historical volatility, Gunawan Dianjaya Steel is 3.23 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 19,353 in Gunung Raja Paksi on September 1, 2024 and sell it today you would earn a total of 1,847 from holding Gunung Raja Paksi or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunawan Dianjaya Steel vs. Gunung Raja Paksi
Performance |
| Timeline |
| Gunawan Dianjaya Steel |
| Gunung Raja Paksi |
Gunawan Dianjaya and Gunung Raja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunawan Dianjaya and Gunung Raja
The main advantage of trading using opposite Gunawan Dianjaya and Gunung Raja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunawan Dianjaya 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.| Gunawan Dianjaya vs. Perusahaan Gas Negara | Gunawan Dianjaya vs. Telkom Indonesia Tbk | Gunawan Dianjaya vs. Mitra Pinasthika Mustika | Gunawan Dianjaya vs. Jakarta Int Hotels |
| Gunung Raja vs. Gunawan Dianjaya Steel | Gunung Raja vs. Steel Pipe Industry | Gunung Raja vs. Impack Pratama Industri | Gunung Raja vs. Ifishdeco PT |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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