Correlation Between Goodyear Indonesia and Ever Shine
Can any of the company-specific risk be diversified away by investing in both Goodyear Indonesia and Ever Shine 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 Goodyear Indonesia and Ever Shine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Indonesia Tbk and Ever Shine Textile, you can compare the effects of market volatilities on Goodyear Indonesia and Ever Shine 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 Goodyear Indonesia with a short position of Ever Shine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Indonesia and Ever Shine.
Diversification Opportunities for Goodyear Indonesia and Ever Shine
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goodyear and Ever is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Indonesia Tbk and Ever Shine Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Shine Textile and Goodyear Indonesia 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 Goodyear Indonesia Tbk are associated (or correlated) with Ever Shine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Shine Textile has no effect on the direction of Goodyear Indonesia i.e., Goodyear Indonesia and Ever Shine go up and down completely randomly.
Pair Corralation between Goodyear Indonesia and Ever Shine
Assuming the 90 days trading horizon Goodyear Indonesia Tbk is expected to under-perform the Ever Shine. But the stock apears to be less risky and, when comparing its historical volatility, Goodyear Indonesia Tbk is 2.11 times less risky than Ever Shine. The stock trades about -0.07 of its potential returns per unit of risk. The Ever Shine Textile is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Ever Shine Textile on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Ever Shine Textile or generate 30.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Indonesia Tbk vs. Ever Shine Textile
Performance |
| Timeline |
| Goodyear Indonesia Tbk |
| Ever Shine Textile |
Goodyear Indonesia and Ever Shine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Indonesia and Ever Shine
The main advantage of trading using opposite Goodyear Indonesia and Ever Shine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Indonesia position performs unexpectedly, Ever Shine 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 Ever Shine will offset losses from the drop in Ever Shine's long position.| Goodyear Indonesia vs. Indo Kordsa Tbk | Goodyear Indonesia vs. Indospring Tbk | Goodyear Indonesia vs. Sepatu Bata Tbk | Goodyear Indonesia vs. Astra Otoparts Tbk |
| Ever Shine vs. Eratex Djaja Tbk | Ever Shine vs. Goodyear Indonesia Tbk | Ever Shine vs. PT Century Textile | Ever Shine vs. Sepatu Bata 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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