Correlation Between Gudang Garam and Asuransi Dayin
Can any of the company-specific risk be diversified away by investing in both Gudang Garam and Asuransi Dayin 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 Asuransi Dayin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gudang Garam Tbk and Asuransi Dayin Mitra, you can compare the effects of market volatilities on Gudang Garam and Asuransi Dayin 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 Asuransi Dayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gudang Garam and Asuransi Dayin.
Diversification Opportunities for Gudang Garam and Asuransi Dayin
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gudang and Asuransi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gudang Garam Tbk and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra 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 Tbk are associated (or correlated) with Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of Gudang Garam i.e., Gudang Garam and Asuransi Dayin go up and down completely randomly.
Pair Corralation between Gudang Garam and Asuransi Dayin
Assuming the 90 days trading horizon Gudang Garam Tbk is expected to under-perform the Asuransi Dayin. In addition to that, Gudang Garam is 1.15 times more volatile than Asuransi Dayin Mitra. It trades about -0.86 of its total potential returns per unit of risk. Asuransi Dayin Mitra is currently generating about 0.04 per unit of volatility. If you would invest 47,800 in Asuransi Dayin Mitra on November 5, 2024 and sell it today you would earn a total of 200.00 from holding Asuransi Dayin Mitra or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gudang Garam Tbk vs. Asuransi Dayin Mitra
Performance |
| Timeline |
| Gudang Garam Tbk |
| Asuransi Dayin Mitra |
Gudang Garam and Asuransi Dayin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gudang Garam and Asuransi Dayin
The main advantage of trading using opposite Gudang Garam and Asuransi Dayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gudang Garam position performs unexpectedly, Asuransi Dayin 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 Asuransi Dayin will offset losses from the drop in Asuransi Dayin's long position.| Gudang Garam vs. Hanjaya Mandala Sampoerna | Gudang Garam vs. Unilever Indonesia Tbk | Gudang Garam vs. PT Indofood Sukses | Gudang Garam vs. United Tractors Tbk |
| Asuransi Dayin vs. Asuransi Bintang Tbk | Asuransi Dayin vs. Asuransi Bina Dana | Asuransi Dayin vs. Asuransi Ramayana Tbk | Asuransi Dayin vs. Asuransi Harta Aman |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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