Correlation Between GM and Bundamedik Tbk
Can any of the company-specific risk be diversified away by investing in both GM and Bundamedik Tbk 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 Bundamedik Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Bundamedik Tbk PT, you can compare the effects of market volatilities on GM and Bundamedik Tbk 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 Bundamedik Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bundamedik Tbk.
Diversification Opportunities for GM and Bundamedik Tbk
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Bundamedik is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bundamedik Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bundamedik Tbk PT 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 Bundamedik Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bundamedik Tbk PT has no effect on the direction of GM i.e., GM and Bundamedik Tbk go up and down completely randomly.
Pair Corralation between GM and Bundamedik Tbk
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.03 times more return on investment than Bundamedik Tbk. However, GM is 1.03 times more volatile than Bundamedik Tbk PT. It trades about 0.05 of its potential returns per unit of risk. Bundamedik Tbk PT is currently generating about -0.04 per unit of risk. If you would invest 3,765 in General Motors on September 4, 2024 and sell it today you would earn a total of 1,739 from holding General Motors or generate 46.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.76% |
| Values | Daily Returns |
General Motors vs. Bundamedik Tbk PT
Performance |
| Timeline |
| General Motors |
| Bundamedik Tbk PT |
GM and Bundamedik Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bundamedik Tbk
The main advantage of trading using opposite GM and Bundamedik Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bundamedik Tbk 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 Bundamedik Tbk will offset losses from the drop in Bundamedik Tbk's long position.The idea behind General Motors and Bundamedik Tbk PT 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.| Bundamedik Tbk vs. Medikaloka Hermina PT | Bundamedik Tbk vs. Mitra Keluarga Karyasehat | Bundamedik Tbk vs. Mitra Pinasthika Mustika | Bundamedik Tbk vs. Jakarta Int Hotels |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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