Correlation Between GUDANG GARAM and Globex Mining
Can any of the company-specific risk be diversified away by investing in both GUDANG GARAM and Globex Mining 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 Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUDANG GARAM and Globex Mining Enterprises, you can compare the effects of market volatilities on GUDANG GARAM and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUDANG GARAM and Globex Mining.
Diversification Opportunities for GUDANG GARAM and Globex Mining
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GUDANG and Globex is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and Globex Mining go up and down completely randomly.
Pair Corralation between GUDANG GARAM and Globex Mining
Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the Globex Mining. But the stock apears to be less risky and, when comparing its historical volatility, GUDANG GARAM is 1.88 times less risky than Globex Mining. The stock trades about -0.65 of its potential returns per unit of risk. The Globex Mining Enterprises is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Globex Mining Enterprises on October 28, 2024 and sell it today you would earn a total of 17.00 from holding Globex Mining Enterprises or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUDANG GARAM vs. Globex Mining Enterprises
Performance |
| Timeline |
| GUDANG GARAM |
| Globex Mining Enterprises |
GUDANG GARAM and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUDANG GARAM and Globex Mining
The main advantage of trading using opposite GUDANG GARAM and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUDANG GARAM position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| GUDANG GARAM vs. Perdoceo Education | GUDANG GARAM vs. EMBARK EDUCATION LTD | GUDANG GARAM vs. GRENKELEASING Dusseldorf | GUDANG GARAM vs. BW OFFSHORE LTD |
| Globex Mining vs. BROADWIND ENRGY | Globex Mining vs. CARSALESCOM | Globex Mining vs. Gaztransport Technigaz SA | Globex Mining vs. Gold Road Resources |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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