Correlation Between Gajah Tunggal and Astra Otoparts
Can any of the company-specific risk be diversified away by investing in both Gajah Tunggal and Astra Otoparts 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 Gajah Tunggal and Astra Otoparts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gajah Tunggal Tbk and Astra Otoparts Tbk, you can compare the effects of market volatilities on Gajah Tunggal and Astra Otoparts 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 Gajah Tunggal with a short position of Astra Otoparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gajah Tunggal and Astra Otoparts.
Diversification Opportunities for Gajah Tunggal and Astra Otoparts
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gajah and Astra is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gajah Tunggal Tbk and Astra Otoparts Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Otoparts Tbk and Gajah Tunggal 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 Gajah Tunggal Tbk are associated (or correlated) with Astra Otoparts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Otoparts Tbk has no effect on the direction of Gajah Tunggal i.e., Gajah Tunggal and Astra Otoparts go up and down completely randomly.
Pair Corralation between Gajah Tunggal and Astra Otoparts
Assuming the 90 days trading horizon Gajah Tunggal Tbk is expected to generate 1.47 times more return on investment than Astra Otoparts. However, Gajah Tunggal is 1.47 times more volatile than Astra Otoparts Tbk. It trades about 0.04 of its potential returns per unit of risk. Astra Otoparts Tbk is currently generating about 0.04 per unit of risk. If you would invest 80,021 in Gajah Tunggal Tbk on August 27, 2024 and sell it today you would earn a total of 33,979 from holding Gajah Tunggal Tbk or generate 42.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gajah Tunggal Tbk vs. Astra Otoparts Tbk
Performance |
| Timeline |
| Gajah Tunggal Tbk |
| Astra Otoparts Tbk |
Gajah Tunggal and Astra Otoparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gajah Tunggal and Astra Otoparts
The main advantage of trading using opposite Gajah Tunggal and Astra Otoparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gajah Tunggal position performs unexpectedly, Astra Otoparts 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 Astra Otoparts will offset losses from the drop in Astra Otoparts' long position.| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom Tbk |
| Astra Otoparts vs. Gajah Tunggal Tbk | Astra Otoparts vs. Astra Graphia Tbk | Astra Otoparts vs. Indomobil Sukses Internasional | Astra Otoparts vs. Astra Agro Lestari |
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 Stocks Directory module to find actively traded stocks across global markets.
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