Correlation Between Gajah Tunggal and Sentul City
Can any of the company-specific risk be diversified away by investing in both Gajah Tunggal and Sentul City 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 Sentul City 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 Sentul City Tbk, you can compare the effects of market volatilities on Gajah Tunggal and Sentul City 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 Sentul City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gajah Tunggal and Sentul City.
Diversification Opportunities for Gajah Tunggal and Sentul City
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gajah and Sentul is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gajah Tunggal Tbk and Sentul City Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentul City 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 Sentul City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentul City Tbk has no effect on the direction of Gajah Tunggal i.e., Gajah Tunggal and Sentul City go up and down completely randomly.
Pair Corralation between Gajah Tunggal and Sentul City
Assuming the 90 days trading horizon Gajah Tunggal Tbk is expected to generate 1.36 times more return on investment than Sentul City. However, Gajah Tunggal is 1.36 times more volatile than Sentul City Tbk. It trades about 0.06 of its potential returns per unit of risk. Sentul City Tbk is currently generating about 0.01 per unit of risk. If you would invest 54,146 in Gajah Tunggal Tbk on September 2, 2024 and sell it today you would earn a total of 59,854 from holding Gajah Tunggal Tbk or generate 110.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gajah Tunggal Tbk vs. Sentul City Tbk
Performance |
| Timeline |
| Gajah Tunggal Tbk |
| Sentul City Tbk |
Gajah Tunggal and Sentul City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gajah Tunggal and Sentul City
The main advantage of trading using opposite Gajah Tunggal and Sentul City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gajah Tunggal position performs unexpectedly, Sentul City 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 Sentul City will offset losses from the drop in Sentul City's long position.| Gajah Tunggal vs. Japfa Comfeed Indonesia | Gajah Tunggal vs. Charoen Pokphand Indonesia | Gajah Tunggal vs. Erajaya Swasembada Tbk | Gajah Tunggal vs. Indofood Cbp Sukses |
| Sentul City vs. Alam Sutera Realty | Sentul City vs. Kawasan Industri Jababeka | Sentul City vs. Lippo Karawaci Tbk | Sentul City vs. Ciputra Development 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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