Correlation Between PT Gajah and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both PT Gajah and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical, you can compare the effects of market volatilities on PT Gajah and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gajah and Eastman Chemical.
Diversification Opportunities for PT Gajah and Eastman Chemical
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GH8 and Eastman is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Gajah Tunggal and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of PT Gajah i.e., PT Gajah and Eastman Chemical go up and down completely randomly.
Pair Corralation between PT Gajah and Eastman Chemical
Assuming the 90 days horizon PT Gajah Tunggal is expected to under-perform the Eastman Chemical. In addition to that, PT Gajah is 4.46 times more volatile than Eastman Chemical. It trades about -0.09 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.15 per unit of volatility. If you would invest 8,634 in Eastman Chemical on October 21, 2024 and sell it today you would earn a total of 262.00 from holding Eastman Chemical or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Gajah Tunggal vs. Eastman Chemical
Performance |
| Timeline |
| PT Gajah Tunggal |
| Eastman Chemical |
PT Gajah and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Gajah and Eastman Chemical
The main advantage of trading using opposite PT Gajah and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Gajah position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| PT Gajah vs. IDP EDUCATION LTD | PT Gajah vs. Dairy Farm International | PT Gajah vs. Algonquin Power Utilities | PT Gajah vs. United Utilities Group |
| Eastman Chemical vs. Coffee Holding Co | Eastman Chemical vs. Xenia Hotels Resorts | Eastman Chemical vs. Pure Storage | Eastman Chemical vs. InterContinental Hotels Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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