Correlation Between GoTo Gojek and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both GoTo Gojek and Adaro Minerals 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 GoTo Gojek and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoTo Gojek Tokopedia and Adaro Minerals Indonesia, you can compare the effects of market volatilities on GoTo Gojek and Adaro Minerals 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 GoTo Gojek with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoTo Gojek and Adaro Minerals.
Diversification Opportunities for GoTo Gojek and Adaro Minerals
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GoTo and Adaro is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GoTo Gojek Tokopedia and Adaro Minerals Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Minerals Indonesia and GoTo Gojek 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 GoTo Gojek Tokopedia are associated (or correlated) with Adaro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Minerals Indonesia has no effect on the direction of GoTo Gojek i.e., GoTo Gojek and Adaro Minerals go up and down completely randomly.
Pair Corralation between GoTo Gojek and Adaro Minerals
Assuming the 90 days trading horizon GoTo Gojek Tokopedia is expected to generate 1.87 times more return on investment than Adaro Minerals. However, GoTo Gojek is 1.87 times more volatile than Adaro Minerals Indonesia. It trades about 0.29 of its potential returns per unit of risk. Adaro Minerals Indonesia is currently generating about -0.46 per unit of risk. If you would invest 7,100 in GoTo Gojek Tokopedia on November 3, 2024 and sell it today you would earn a total of 1,200 from holding GoTo Gojek Tokopedia or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoTo Gojek Tokopedia vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| GoTo Gojek Tokopedia |
| Adaro Minerals Indonesia |
GoTo Gojek and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoTo Gojek and Adaro Minerals
The main advantage of trading using opposite GoTo Gojek and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoTo Gojek position performs unexpectedly, Adaro Minerals 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 Adaro Minerals will offset losses from the drop in Adaro Minerals' long position.| GoTo Gojek vs. PT Bukalapak | GoTo Gojek vs. Bank Artos Indonesia | GoTo Gojek vs. Elang Mahkota Teknologi | GoTo Gojek vs. Adaro Minerals Indonesia |
| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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