Correlation Between Gema Grahasarana and Fast Food
Can any of the company-specific risk be diversified away by investing in both Gema Grahasarana and Fast Food 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 Fast Food 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 Fast Food Indonesia, you can compare the effects of market volatilities on Gema Grahasarana and Fast Food 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gema Grahasarana and Fast Food.
Diversification Opportunities for Gema Grahasarana and Fast Food
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gema and Fast is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gema Grahasarana Tbk and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food Indonesia 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Gema Grahasarana i.e., Gema Grahasarana and Fast Food go up and down completely randomly.
Pair Corralation between Gema Grahasarana and Fast Food
Assuming the 90 days trading horizon Gema Grahasarana Tbk is expected to generate 1.6 times more return on investment than Fast Food. However, Gema Grahasarana is 1.6 times more volatile than Fast Food Indonesia. It trades about -0.01 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.21 per unit of risk. If you would invest 26,714 in Gema Grahasarana Tbk on August 25, 2024 and sell it today you would lose (3,314) from holding Gema Grahasarana Tbk or give up 12.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gema Grahasarana Tbk vs. Fast Food Indonesia
Performance |
| Timeline |
| Gema Grahasarana Tbk |
| Fast Food Indonesia |
Gema Grahasarana and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gema Grahasarana and Fast Food
The main advantage of trading using opposite Gema Grahasarana and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gema Grahasarana position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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