Correlation Between Gema Grahasarana and Intraco Penta
Can any of the company-specific risk be diversified away by investing in both Gema Grahasarana and Intraco Penta 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 Intraco Penta 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 Intraco Penta Tbk, you can compare the effects of market volatilities on Gema Grahasarana and Intraco Penta 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 Intraco Penta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gema Grahasarana and Intraco Penta.
Diversification Opportunities for Gema Grahasarana and Intraco Penta
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gema and Intraco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gema Grahasarana Tbk and Intraco Penta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intraco Penta 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 Intraco Penta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intraco Penta Tbk has no effect on the direction of Gema Grahasarana i.e., Gema Grahasarana and Intraco Penta go up and down completely randomly.
Pair Corralation between Gema Grahasarana and Intraco Penta
Assuming the 90 days trading horizon Gema Grahasarana Tbk is expected to under-perform the Intraco Penta. But the stock apears to be less risky and, when comparing its historical volatility, Gema Grahasarana Tbk is 2.88 times less risky than Intraco Penta. The stock trades about -0.28 of its potential returns per unit of risk. The Intraco Penta Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Intraco Penta Tbk on August 27, 2024 and sell it today you would lose (100.00) from holding Intraco Penta Tbk or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gema Grahasarana Tbk vs. Intraco Penta Tbk
Performance |
| Timeline |
| Gema Grahasarana Tbk |
| Intraco Penta Tbk |
Gema Grahasarana and Intraco Penta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gema Grahasarana and Intraco Penta
The main advantage of trading using opposite Gema Grahasarana and Intraco Penta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gema Grahasarana position performs unexpectedly, Intraco Penta 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 Intraco Penta will offset losses from the drop in Intraco Penta'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 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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