Correlation Between Geoprima Solusi and Indo Oil
Can any of the company-specific risk be diversified away by investing in both Geoprima Solusi and Indo Oil 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 Geoprima Solusi and Indo Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geoprima Solusi Tbk and Indo Oil Perkasa, you can compare the effects of market volatilities on Geoprima Solusi and Indo Oil 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 Geoprima Solusi with a short position of Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geoprima Solusi and Indo Oil.
Diversification Opportunities for Geoprima Solusi and Indo Oil
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geoprima and Indo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Geoprima Solusi Tbk and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa and Geoprima Solusi 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 Geoprima Solusi Tbk are associated (or correlated) with Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of Geoprima Solusi i.e., Geoprima Solusi and Indo Oil go up and down completely randomly.
Pair Corralation between Geoprima Solusi and Indo Oil
Assuming the 90 days trading horizon Geoprima Solusi Tbk is expected to generate 1.78 times more return on investment than Indo Oil. However, Geoprima Solusi is 1.78 times more volatile than Indo Oil Perkasa. It trades about 0.06 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.03 per unit of risk. If you would invest 13,900 in Geoprima Solusi Tbk on August 30, 2024 and sell it today you would earn a total of 21,700 from holding Geoprima Solusi Tbk or generate 156.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geoprima Solusi Tbk vs. Indo Oil Perkasa
Performance |
| Timeline |
| Geoprima Solusi Tbk |
| Indo Oil Perkasa |
Geoprima Solusi and Indo Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geoprima Solusi and Indo Oil
The main advantage of trading using opposite Geoprima Solusi and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geoprima Solusi position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil's long position.| Geoprima Solusi vs. Mandala Multifinance Tbk | Geoprima Solusi vs. PT Techno9 Indonesia | Geoprima Solusi vs. Bank BRISyariah Tbk | Geoprima Solusi vs. Bumi Resources Tbk |
| Indo Oil vs. Sentra Food Indonesia | Indo Oil vs. Buyung Poetra Sembada | Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Campina Ice Cream |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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