Correlation Between Gozco Plantations and Trimitra Prawara
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations and Trimitra Prawara 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 Gozco Plantations and Trimitra Prawara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gozco Plantations Tbk and Trimitra Prawara Goldland, you can compare the effects of market volatilities on Gozco Plantations and Trimitra Prawara 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 Gozco Plantations with a short position of Trimitra Prawara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Trimitra Prawara.
Diversification Opportunities for Gozco Plantations and Trimitra Prawara
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gozco and Trimitra is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations Tbk and Trimitra Prawara Goldland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Prawara Goldland and Gozco Plantations 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 Gozco Plantations Tbk are associated (or correlated) with Trimitra Prawara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Prawara Goldland has no effect on the direction of Gozco Plantations i.e., Gozco Plantations and Trimitra Prawara go up and down completely randomly.
Pair Corralation between Gozco Plantations and Trimitra Prawara
Assuming the 90 days trading horizon Gozco Plantations Tbk is expected to generate 1.07 times more return on investment than Trimitra Prawara. However, Gozco Plantations is 1.07 times more volatile than Trimitra Prawara Goldland. It trades about -0.01 of its potential returns per unit of risk. Trimitra Prawara Goldland is currently generating about -0.08 per unit of risk. If you would invest 12,800 in Gozco Plantations Tbk on September 3, 2024 and sell it today you would lose (3,000) from holding Gozco Plantations Tbk or give up 23.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Trimitra Prawara Goldland
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Trimitra Prawara Goldland |
Gozco Plantations and Trimitra Prawara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Trimitra Prawara
The main advantage of trading using opposite Gozco Plantations and Trimitra Prawara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations position performs unexpectedly, Trimitra Prawara 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 Trimitra Prawara will offset losses from the drop in Trimitra Prawara's long position.| Gozco Plantations vs. Sampoerna Agro Tbk | Gozco Plantations vs. Tunas Baru Lampung | Gozco Plantations vs. Bakrie Sumatera Plantations | Gozco Plantations vs. Bisi International Tbk |
| Trimitra Prawara vs. Merdeka Copper Gold | Trimitra Prawara vs. Pertamina Geothermal Energy | Trimitra Prawara vs. Trinitan Metals and | Trimitra Prawara vs. Eastparc Hotel 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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