Correlation Between GUDANG GARAM and American States
Can any of the company-specific risk be diversified away by investing in both GUDANG GARAM and American States 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 GUDANG GARAM and American States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUDANG GARAM and American States Water, you can compare the effects of market volatilities on GUDANG GARAM and American States 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 GUDANG GARAM with a short position of American States. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUDANG GARAM and American States.
Diversification Opportunities for GUDANG GARAM and American States
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GUDANG and American is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water and GUDANG GARAM 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 GUDANG GARAM are associated (or correlated) with American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and American States go up and down completely randomly.
Pair Corralation between GUDANG GARAM and American States
Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the American States. In addition to that, GUDANG GARAM is 1.02 times more volatile than American States Water. It trades about -0.23 of its total potential returns per unit of risk. American States Water is currently generating about 0.21 per unit of volatility. If you would invest 7,496 in American States Water on September 1, 2024 and sell it today you would earn a total of 529.00 from holding American States Water or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUDANG GARAM vs. American States Water
Performance |
| Timeline |
| GUDANG GARAM |
| American States Water |
GUDANG GARAM and American States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUDANG GARAM and American States
The main advantage of trading using opposite GUDANG GARAM and American States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUDANG GARAM position performs unexpectedly, American States 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 American States will offset losses from the drop in American States' long position.| GUDANG GARAM vs. SIVERS SEMICONDUCTORS AB | GUDANG GARAM vs. Darden Restaurants | GUDANG GARAM vs. Reliance Steel Aluminum | GUDANG GARAM vs. Q2M Managementberatung AG |
| American States vs. MYFAIR GOLD P | American States vs. Calibre Mining Corp | American States vs. DELTA AIR LINES | American States vs. VIVA WINE GROUP |
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 Directory module to find actively traded commodities issued by global exchanges.
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