Correlation Between Gunung Raja and Indonesia Fibreboard
Can any of the company-specific risk be diversified away by investing in both Gunung Raja and Indonesia Fibreboard 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 Gunung Raja and Indonesia Fibreboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gunung Raja Paksi and Indonesia Fibreboard Industry, you can compare the effects of market volatilities on Gunung Raja and Indonesia Fibreboard 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 Gunung Raja with a short position of Indonesia Fibreboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunung Raja and Indonesia Fibreboard.
Diversification Opportunities for Gunung Raja and Indonesia Fibreboard
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gunung and Indonesia is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gunung Raja Paksi and Indonesia Fibreboard Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesia Fibreboard and Gunung Raja 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 Gunung Raja Paksi are associated (or correlated) with Indonesia Fibreboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesia Fibreboard has no effect on the direction of Gunung Raja i.e., Gunung Raja and Indonesia Fibreboard go up and down completely randomly.
Pair Corralation between Gunung Raja and Indonesia Fibreboard
Assuming the 90 days trading horizon Gunung Raja Paksi is expected to under-perform the Indonesia Fibreboard. In addition to that, Gunung Raja is 1.6 times more volatile than Indonesia Fibreboard Industry. It trades about -1.0 of its total potential returns per unit of risk. Indonesia Fibreboard Industry is currently generating about 0.02 per unit of volatility. If you would invest 20,095 in Indonesia Fibreboard Industry on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Indonesia Fibreboard Industry or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gunung Raja Paksi vs. Indonesia Fibreboard Industry
Performance |
| Timeline |
| Gunung Raja Paksi |
| Indonesia Fibreboard |
Gunung Raja and Indonesia Fibreboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunung Raja and Indonesia Fibreboard
The main advantage of trading using opposite Gunung Raja and Indonesia Fibreboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunung Raja position performs unexpectedly, Indonesia Fibreboard 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 Indonesia Fibreboard will offset losses from the drop in Indonesia Fibreboard's long position.| Gunung Raja vs. Gunawan Dianjaya Steel | Gunung Raja vs. Steel Pipe Industry | Gunung Raja vs. Ifishdeco PT | Gunung Raja vs. Saraswanti Anugerah Makmur |
| Indonesia Fibreboard vs. Gunung Raja Paksi | Indonesia Fibreboard vs. Satyamitra Kemas Lestari | Indonesia Fibreboard vs. Ifishdeco PT | Indonesia Fibreboard vs. Saraswanti Anugerah Makmur |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |