Correlation Between Gudang Garam and Bank BRISyariah
Can any of the company-specific risk be diversified away by investing in both Gudang Garam and Bank BRISyariah 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 Bank BRISyariah 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 Bank BRISyariah Tbk, you can compare the effects of market volatilities on Gudang Garam and Bank BRISyariah 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 Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gudang Garam and Bank BRISyariah.
Diversification Opportunities for Gudang Garam and Bank BRISyariah
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gudang and Bank is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gudang Garam Tbk and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah Tbk 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 Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Gudang Garam i.e., Gudang Garam and Bank BRISyariah go up and down completely randomly.
Pair Corralation between Gudang Garam and Bank BRISyariah
Assuming the 90 days trading horizon Gudang Garam Tbk is expected to under-perform the Bank BRISyariah. But the stock apears to be less risky and, when comparing its historical volatility, Gudang Garam Tbk is 2.0 times less risky than Bank BRISyariah. The stock trades about -0.24 of its potential returns per unit of risk. The Bank BRISyariah Tbk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 295,000 in Bank BRISyariah Tbk on September 2, 2024 and sell it today you would lose (5,000) from holding Bank BRISyariah Tbk or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gudang Garam Tbk vs. Bank BRISyariah Tbk
Performance |
| Timeline |
| Gudang Garam Tbk |
| Bank BRISyariah Tbk |
Gudang Garam and Bank BRISyariah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gudang Garam and Bank BRISyariah
The main advantage of trading using opposite Gudang Garam and Bank BRISyariah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gudang Garam position performs unexpectedly, Bank BRISyariah 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 Bank BRISyariah will offset losses from the drop in Bank BRISyariah'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 |
| Bank BRISyariah vs. Ace Hardware Indonesia | Bank BRISyariah vs. Merdeka Copper Gold | Bank BRISyariah vs. Mitra Pinasthika Mustika | Bank BRISyariah vs. Jakarta Int Hotels |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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