Correlation Between Gozco Plantations and Karya Bersama
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations and Karya Bersama 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 Karya Bersama 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 Karya Bersama Anugerah, you can compare the effects of market volatilities on Gozco Plantations and Karya Bersama 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 Karya Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Karya Bersama.
Diversification Opportunities for Gozco Plantations and Karya Bersama
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gozco and Karya is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations Tbk and Karya Bersama Anugerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karya Bersama Anugerah 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 Karya Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karya Bersama Anugerah has no effect on the direction of Gozco Plantations i.e., Gozco Plantations and Karya Bersama go up and down completely randomly.
Pair Corralation between Gozco Plantations and Karya Bersama
Assuming the 90 days trading horizon Gozco Plantations Tbk is expected to under-perform the Karya Bersama. But the stock apears to be less risky and, when comparing its historical volatility, Gozco Plantations Tbk is 1.25 times less risky than Karya Bersama. The stock trades about -0.16 of its potential returns per unit of risk. The Karya Bersama Anugerah is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Karya Bersama Anugerah on November 30, 2024 and sell it today you would lose (200.00) from holding Karya Bersama Anugerah or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Karya Bersama Anugerah
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Karya Bersama Anugerah |
Gozco Plantations and Karya Bersama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Karya Bersama
The main advantage of trading using opposite Gozco Plantations and Karya Bersama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations position performs unexpectedly, Karya Bersama 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 Karya Bersama will offset losses from the drop in Karya Bersama'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 |
| Karya Bersama vs. Putra Rajawali Kencana | Karya Bersama vs. Repower Asia Indonesia | Karya Bersama vs. DMS Propertindo Tbk | Karya Bersama vs. Diamond Citra Propertindo |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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