Correlation Between GUDANG GARAM and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both GUDANG GARAM and Vastned Retail 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 Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUDANG GARAM and Vastned Retail NV, you can compare the effects of market volatilities on GUDANG GARAM and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUDANG GARAM and Vastned Retail.
Diversification Opportunities for GUDANG GARAM and Vastned Retail
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GUDANG and Vastned is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and Vastned Retail go up and down completely randomly.
Pair Corralation between GUDANG GARAM and Vastned Retail
Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the Vastned Retail. In addition to that, GUDANG GARAM is 1.9 times more volatile than Vastned Retail NV. It trades about -0.11 of its total potential returns per unit of risk. Vastned Retail NV is currently generating about -0.01 per unit of volatility. If you would invest 2,308 in Vastned Retail NV on September 5, 2024 and sell it today you would lose (33.00) from holding Vastned Retail NV or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
GUDANG GARAM vs. Vastned Retail NV
Performance |
| Timeline |
| GUDANG GARAM |
| Vastned Retail NV |
GUDANG GARAM and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUDANG GARAM and Vastned Retail
The main advantage of trading using opposite GUDANG GARAM and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUDANG GARAM position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| GUDANG GARAM vs. TOTAL GABON | GUDANG GARAM vs. Walgreens Boots Alliance | GUDANG GARAM vs. Peak Resources Limited |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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