Correlation Between GM and Solusi Tunas
Can any of the company-specific risk be diversified away by investing in both GM and Solusi Tunas 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 Solusi Tunas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Solusi Tunas Pratama, you can compare the effects of market volatilities on GM and Solusi Tunas 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 Solusi Tunas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Solusi Tunas.
Diversification Opportunities for GM and Solusi Tunas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Solusi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Solusi Tunas Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Tunas Pratama 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 Solusi Tunas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Tunas Pratama has no effect on the direction of GM i.e., GM and Solusi Tunas go up and down completely randomly.
Pair Corralation between GM and Solusi Tunas
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.54 times more return on investment than Solusi Tunas. However, GM is 2.54 times more volatile than Solusi Tunas Pratama. It trades about 0.08 of its potential returns per unit of risk. Solusi Tunas Pratama is currently generating about 0.1 per unit of risk. If you would invest 4,539 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,020 from holding General Motors or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Solusi Tunas Pratama
Performance |
| Timeline |
| General Motors |
| Solusi Tunas Pratama |
GM and Solusi Tunas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Solusi Tunas
The main advantage of trading using opposite GM and Solusi Tunas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Solusi Tunas 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 Solusi Tunas will offset losses from the drop in Solusi Tunas' long position.The idea behind General Motors and Solusi Tunas Pratama 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.| Solusi Tunas vs. Inti Bangun Sejahtera | Solusi Tunas vs. Tower Bersama Infrastructure | Solusi Tunas vs. Bali Towerindo Sentra | Solusi Tunas vs. Siantar Top 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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