Correlation Between GM and Anugerah Kagum
Can any of the company-specific risk be diversified away by investing in both GM and Anugerah Kagum 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 GM and Anugerah Kagum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Anugerah Kagum Karya, you can compare the effects of market volatilities on GM and Anugerah Kagum 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 GM with a short position of Anugerah Kagum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Anugerah Kagum.
Diversification Opportunities for GM and Anugerah Kagum
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Anugerah is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Anugerah Kagum Karya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anugerah Kagum Karya and GM 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 General Motors are associated (or correlated) with Anugerah Kagum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anugerah Kagum Karya has no effect on the direction of GM i.e., GM and Anugerah Kagum go up and down completely randomly.
Pair Corralation between GM and Anugerah Kagum
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Anugerah Kagum. In addition to that, GM is 1.13 times more volatile than Anugerah Kagum Karya. It trades about -0.09 of its total potential returns per unit of risk. Anugerah Kagum Karya is currently generating about 0.15 per unit of volatility. If you would invest 1,500 in Anugerah Kagum Karya on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Anugerah Kagum Karya or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
General Motors vs. Anugerah Kagum Karya
Performance |
| Timeline |
| General Motors |
| Anugerah Kagum Karya |
GM and Anugerah Kagum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Anugerah Kagum
The main advantage of trading using opposite GM and Anugerah Kagum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Anugerah Kagum 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 Anugerah Kagum will offset losses from the drop in Anugerah Kagum's long position.The idea behind General Motors and Anugerah Kagum Karya pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Anugerah Kagum vs. Asiaplast Industries Tbk | Anugerah Kagum vs. Argha Karya Prima | Anugerah Kagum vs. Alumindo Light Metal | Anugerah Kagum vs. Asahimas Flat Glass |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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