Correlation Between Gajah Tunggal and Perusahaan Perkebunan
Can any of the company-specific risk be diversified away by investing in both Gajah Tunggal and Perusahaan Perkebunan 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 Perusahaan Perkebunan 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 Perusahaan Perkebunan London, you can compare the effects of market volatilities on Gajah Tunggal and Perusahaan Perkebunan 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 Perusahaan Perkebunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gajah Tunggal and Perusahaan Perkebunan.
Diversification Opportunities for Gajah Tunggal and Perusahaan Perkebunan
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gajah and Perusahaan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gajah Tunggal Tbk and Perusahaan Perkebunan London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perkebunan 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 Perusahaan Perkebunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perkebunan has no effect on the direction of Gajah Tunggal i.e., Gajah Tunggal and Perusahaan Perkebunan go up and down completely randomly.
Pair Corralation between Gajah Tunggal and Perusahaan Perkebunan
Assuming the 90 days trading horizon Gajah Tunggal Tbk is expected to generate 1.99 times more return on investment than Perusahaan Perkebunan. However, Gajah Tunggal is 1.99 times more volatile than Perusahaan Perkebunan London. It trades about 0.02 of its potential returns per unit of risk. Perusahaan Perkebunan London is currently generating about 0.01 per unit of risk. If you would invest 112,125 in Gajah Tunggal Tbk on August 28, 2024 and sell it today you would earn a total of 4,875 from holding Gajah Tunggal Tbk or generate 4.35% 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. Perusahaan Perkebunan London
Performance |
| Timeline |
| Gajah Tunggal Tbk |
| Perusahaan Perkebunan |
Gajah Tunggal and Perusahaan Perkebunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gajah Tunggal and Perusahaan Perkebunan
The main advantage of trading using opposite Gajah Tunggal and Perusahaan Perkebunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gajah Tunggal position performs unexpectedly, Perusahaan Perkebunan 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 Perusahaan Perkebunan will offset losses from the drop in Perusahaan Perkebunan's 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 |
| Perusahaan Perkebunan vs. Astra Agro Lestari | Perusahaan Perkebunan vs. Vale Indonesia Tbk | Perusahaan Perkebunan vs. Timah Persero Tbk | Perusahaan Perkebunan vs. United Tractors 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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