Correlation Between Gema Grahasarana and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Gema Grahasarana and Bayu Buana 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 Gema Grahasarana and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gema Grahasarana Tbk and Bayu Buana Tbk, you can compare the effects of market volatilities on Gema Grahasarana and Bayu Buana 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 Gema Grahasarana with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gema Grahasarana and Bayu Buana.
Diversification Opportunities for Gema Grahasarana and Bayu Buana
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gema and Bayu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gema Grahasarana Tbk and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk and Gema Grahasarana 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 Gema Grahasarana Tbk are associated (or correlated) with Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Gema Grahasarana i.e., Gema Grahasarana and Bayu Buana go up and down completely randomly.
Pair Corralation between Gema Grahasarana and Bayu Buana
Assuming the 90 days trading horizon Gema Grahasarana Tbk is expected to generate 2.47 times more return on investment than Bayu Buana. However, Gema Grahasarana is 2.47 times more volatile than Bayu Buana Tbk. It trades about 0.01 of its potential returns per unit of risk. Bayu Buana Tbk is currently generating about -0.16 per unit of risk. If you would invest 16,000 in Gema Grahasarana Tbk on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Gema Grahasarana Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gema Grahasarana Tbk vs. Bayu Buana Tbk
Performance |
| Timeline |
| Gema Grahasarana Tbk |
| Bayu Buana Tbk |
Gema Grahasarana and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gema Grahasarana and Bayu Buana
The main advantage of trading using opposite Gema Grahasarana and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gema Grahasarana position performs unexpectedly, Bayu Buana 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Gema Grahasarana vs. Fortune Indonesia Tbk | Gema Grahasarana vs. Fks Multi Agro | Gema Grahasarana vs. Bayu Buana Tbk | Gema Grahasarana vs. Fast Food Indonesia |
| Bayu Buana vs. Catur Sentosa Adiprana | Bayu Buana vs. Fast Food Indonesia | Bayu Buana vs. Hero Supermarket Tbk | Bayu Buana vs. Graha Layar Prima |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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