Correlation Between PT Gudang and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both PT Gudang and Imperial Brands 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 PT Gudang and Imperial Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Gudang Garam and Imperial Brands PLC, you can compare the effects of market volatilities on PT Gudang and Imperial Brands 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 PT Gudang with a short position of Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gudang and Imperial Brands.
Diversification Opportunities for PT Gudang and Imperial Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GGNPF and Imperial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Gudang Garam and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands PLC and PT Gudang 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 PT Gudang Garam are associated (or correlated) with Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of PT Gudang i.e., PT Gudang and Imperial Brands go up and down completely randomly.
Pair Corralation between PT Gudang and Imperial Brands
Assuming the 90 days horizon PT Gudang Garam is expected to under-perform the Imperial Brands. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Gudang Garam is 1.81 times less risky than Imperial Brands. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Imperial Brands PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,510 in Imperial Brands PLC on August 29, 2024 and sell it today you would earn a total of 683.00 from holding Imperial Brands PLC or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.51% |
| Values | Daily Returns |
PT Gudang Garam vs. Imperial Brands PLC
Performance |
| Timeline |
| PT Gudang Garam |
| Imperial Brands PLC |
PT Gudang and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Gudang and Imperial Brands
The main advantage of trading using opposite PT Gudang and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Gudang position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| PT Gudang vs. Centessa Pharmaceuticals PLC | PT Gudang vs. BioNTech SE | PT Gudang vs. Lipocine | PT Gudang vs. Inhibrx |
| Imperial Brands vs. Japan Tobacco ADR | Imperial Brands vs. Turning Point Brands | Imperial Brands vs. British American Tobacco | Imperial Brands vs. Universal |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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