Correlation Between GM and Berkah Prima
Can any of the company-specific risk be diversified away by investing in both GM and Berkah Prima 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 Berkah Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Berkah Prima Perkasa, you can compare the effects of market volatilities on GM and Berkah Prima 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 Berkah Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Berkah Prima.
Diversification Opportunities for GM and Berkah Prima
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and Berkah is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Berkah Prima Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Prima Perkasa 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 Berkah Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Prima Perkasa has no effect on the direction of GM i.e., GM and Berkah Prima go up and down completely randomly.
Pair Corralation between GM and Berkah Prima
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.27 times more return on investment than Berkah Prima. However, GM is 2.27 times more volatile than Berkah Prima Perkasa. It trades about 0.16 of its potential returns per unit of risk. Berkah Prima Perkasa is currently generating about -0.19 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Berkah Prima Perkasa
Performance |
| Timeline |
| General Motors |
| Berkah Prima Perkasa |
GM and Berkah Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Berkah Prima
The main advantage of trading using opposite GM and Berkah Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Berkah Prima 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 Berkah Prima will offset losses from the drop in Berkah Prima's long position.The idea behind General Motors and Berkah Prima Perkasa 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.| Berkah Prima vs. Multipolar Technology Tbk | Berkah Prima vs. Hensel Davest Indonesia | Berkah Prima vs. Anabatic Technologies Tbk | Berkah Prima vs. Digital Mediatama Maxima |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |