Correlation Between PT Gajah and Advanced Drainage
Can any of the company-specific risk be diversified away by investing in both PT Gajah and Advanced Drainage 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 Gajah and Advanced Drainage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Gajah Tunggal and Advanced Drainage Systems, you can compare the effects of market volatilities on PT Gajah and Advanced Drainage 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 Gajah with a short position of Advanced Drainage. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gajah and Advanced Drainage.
Diversification Opportunities for PT Gajah and Advanced Drainage
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GH8 and Advanced is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PT Gajah Tunggal and Advanced Drainage Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Drainage Systems and PT Gajah 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 Gajah Tunggal are associated (or correlated) with Advanced Drainage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Drainage Systems has no effect on the direction of PT Gajah i.e., PT Gajah and Advanced Drainage go up and down completely randomly.
Pair Corralation between PT Gajah and Advanced Drainage
Assuming the 90 days horizon PT Gajah Tunggal is expected to under-perform the Advanced Drainage. In addition to that, PT Gajah is 3.09 times more volatile than Advanced Drainage Systems. It trades about -0.03 of its total potential returns per unit of risk. Advanced Drainage Systems is currently generating about -0.07 per unit of volatility. If you would invest 13,640 in Advanced Drainage Systems on September 1, 2024 and sell it today you would lose (945.00) from holding Advanced Drainage Systems or give up 6.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Gajah Tunggal vs. Advanced Drainage Systems
Performance |
| Timeline |
| PT Gajah Tunggal |
| Advanced Drainage Systems |
PT Gajah and Advanced Drainage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Gajah and Advanced Drainage
The main advantage of trading using opposite PT Gajah and Advanced Drainage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Gajah position performs unexpectedly, Advanced Drainage 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 Advanced Drainage will offset losses from the drop in Advanced Drainage's long position.| PT Gajah vs. SCANSOURCE | PT Gajah vs. RETAIL FOOD GROUP | PT Gajah vs. AUTO TRADER ADR | PT Gajah vs. GungHo Online Entertainment |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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