Correlation Between Gunawan Dianjaya and Ladangbaja Murni
Can any of the company-specific risk be diversified away by investing in both Gunawan Dianjaya and Ladangbaja Murni 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 Ladangbaja Murni 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 Ladangbaja Murni PT, you can compare the effects of market volatilities on Gunawan Dianjaya and Ladangbaja Murni 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 Ladangbaja Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunawan Dianjaya and Ladangbaja Murni.
Diversification Opportunities for Gunawan Dianjaya and Ladangbaja Murni
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gunawan and Ladangbaja is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gunawan Dianjaya Steel and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni 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 Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of Gunawan Dianjaya i.e., Gunawan Dianjaya and Ladangbaja Murni go up and down completely randomly.
Pair Corralation between Gunawan Dianjaya and Ladangbaja Murni
Assuming the 90 days trading horizon Gunawan Dianjaya Steel is expected to under-perform the Ladangbaja Murni. But the stock apears to be less risky and, when comparing its historical volatility, Gunawan Dianjaya Steel is 2.5 times less risky than Ladangbaja Murni. The stock trades about -0.03 of its potential returns per unit of risk. The Ladangbaja Murni PT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Ladangbaja Murni PT on August 26, 2024 and sell it today you would earn a total of 31,100 from holding Ladangbaja Murni PT or generate 609.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunawan Dianjaya Steel vs. Ladangbaja Murni PT
Performance |
| Timeline |
| Gunawan Dianjaya Steel |
| Ladangbaja Murni |
Gunawan Dianjaya and Ladangbaja Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunawan Dianjaya and Ladangbaja Murni
The main advantage of trading using opposite Gunawan Dianjaya and Ladangbaja Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunawan Dianjaya position performs unexpectedly, Ladangbaja Murni 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 Ladangbaja Murni will offset losses from the drop in Ladangbaja Murni's long position.| Gunawan Dianjaya vs. Kedaung Indah Can | Gunawan Dianjaya vs. Langgeng Makmur Industri | Gunawan Dianjaya vs. Kabelindo Murni Tbk | Gunawan Dianjaya vs. Mustika Ratu Tbk |
| Ladangbaja Murni vs. Gunawan Dianjaya Steel | Ladangbaja Murni vs. Steel Pipe Industry | Ladangbaja Murni vs. Ifishdeco PT | Ladangbaja Murni vs. Saraswanti Anugerah Makmur |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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