Correlation Between GM and Graha Andrasentra
Can any of the company-specific risk be diversified away by investing in both GM and Graha Andrasentra 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 Graha Andrasentra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Graha Andrasentra Propertindo, you can compare the effects of market volatilities on GM and Graha Andrasentra 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 Graha Andrasentra. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Graha Andrasentra.
Diversification Opportunities for GM and Graha Andrasentra
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Graha is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Graha Andrasentra Propertindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Andrasentra 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 Graha Andrasentra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Andrasentra has no effect on the direction of GM i.e., GM and Graha Andrasentra go up and down completely randomly.
Pair Corralation between GM and Graha Andrasentra
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.34 times more return on investment than Graha Andrasentra. However, General Motors is 2.97 times less risky than Graha Andrasentra. It trades about 0.05 of its potential returns per unit of risk. Graha Andrasentra Propertindo is currently generating about -0.05 per unit of risk. If you would invest 3,507 in General Motors on November 28, 2024 and sell it today you would earn a total of 1,418 from holding General Motors or generate 40.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.71% |
| Values | Daily Returns |
General Motors vs. Graha Andrasentra Propertindo
Performance |
| Timeline |
| General Motors |
| Graha Andrasentra |
GM and Graha Andrasentra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Graha Andrasentra
The main advantage of trading using opposite GM and Graha Andrasentra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Graha Andrasentra 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 Graha Andrasentra will offset losses from the drop in Graha Andrasentra's long position.The idea behind General Motors and Graha Andrasentra Propertindo 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.| Graha Andrasentra vs. Fast Food Indonesia | Graha Andrasentra vs. Medikaloka Hermina PT | Graha Andrasentra vs. Prodia Widyahusada Tbk | Graha Andrasentra vs. MAP Aktif Adiperkasa |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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