Correlation Between Gudang Garam and PT Sunter
Can any of the company-specific risk be diversified away by investing in both Gudang Garam and PT Sunter 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 PT Sunter 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 PT Sunter Lakeside, you can compare the effects of market volatilities on Gudang Garam and PT Sunter 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 PT Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gudang Garam and PT Sunter.
Diversification Opportunities for Gudang Garam and PT Sunter
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gudang and SNLK is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gudang Garam Tbk and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside 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 PT Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of Gudang Garam i.e., Gudang Garam and PT Sunter go up and down completely randomly.
Pair Corralation between Gudang Garam and PT Sunter
Assuming the 90 days trading horizon Gudang Garam Tbk is expected to under-perform the PT Sunter. But the stock apears to be less risky and, when comparing its historical volatility, Gudang Garam Tbk is 2.09 times less risky than PT Sunter. The stock trades about -0.26 of its potential returns per unit of risk. The PT Sunter Lakeside is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 61,000 in PT Sunter Lakeside on November 18, 2024 and sell it today you would earn a total of 8,500 from holding PT Sunter Lakeside or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gudang Garam Tbk vs. PT Sunter Lakeside
Performance |
| Timeline |
| Gudang Garam Tbk |
| PT Sunter Lakeside |
Gudang Garam and PT Sunter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gudang Garam and PT Sunter
The main advantage of trading using opposite Gudang Garam and PT Sunter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gudang Garam position performs unexpectedly, PT Sunter 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 PT Sunter will offset losses from the drop in PT Sunter'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 |
| PT Sunter vs. Gaya Abadi Sempurna | PT Sunter vs. Damai Sejahtera Abadi | PT Sunter vs. Red Planet Indonesia | PT Sunter vs. PAM Mineral Tbk |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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