Correlation Between Gema Grahasarana and Fortune Indonesia
Can any of the company-specific risk be diversified away by investing in both Gema Grahasarana and Fortune Indonesia 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 Fortune Indonesia 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 Fortune Indonesia Tbk, you can compare the effects of market volatilities on Gema Grahasarana and Fortune Indonesia 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 Fortune Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gema Grahasarana and Fortune Indonesia.
Diversification Opportunities for Gema Grahasarana and Fortune Indonesia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gema and Fortune is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gema Grahasarana Tbk and Fortune Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Indonesia 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 Fortune Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Indonesia Tbk has no effect on the direction of Gema Grahasarana i.e., Gema Grahasarana and Fortune Indonesia go up and down completely randomly.
Pair Corralation between Gema Grahasarana and Fortune Indonesia
Assuming the 90 days trading horizon Gema Grahasarana is expected to generate 22.69 times less return on investment than Fortune Indonesia. But when comparing it to its historical volatility, Gema Grahasarana Tbk is 4.29 times less risky than Fortune Indonesia. It trades about 0.01 of its potential returns per unit of risk. Fortune Indonesia Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 350,000 in Fortune Indonesia Tbk on November 3, 2024 and sell it today you would earn a total of 6,000 from holding Fortune Indonesia Tbk or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gema Grahasarana Tbk vs. Fortune Indonesia Tbk
Performance |
| Timeline |
| Gema Grahasarana Tbk |
| Fortune Indonesia Tbk |
Gema Grahasarana and Fortune Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gema Grahasarana and Fortune Indonesia
The main advantage of trading using opposite Gema Grahasarana and Fortune Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gema Grahasarana position performs unexpectedly, Fortune Indonesia 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 Fortune Indonesia will offset losses from the drop in Fortune Indonesia'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 |
| Fortune Indonesia vs. Gema Grahasarana Tbk | Fortune Indonesia vs. Bayu Buana Tbk | Fortune Indonesia vs. Fast Food Indonesia | Fortune Indonesia vs. Mahaka Media 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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