Correlation Between Gozco Plantations and Total Bangun
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations and Total Bangun 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 Total Bangun 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 Total Bangun Persada, you can compare the effects of market volatilities on Gozco Plantations and Total Bangun 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 Total Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Total Bangun.
Diversification Opportunities for Gozco Plantations and Total Bangun
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gozco and Total is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations Tbk and Total Bangun Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Bangun Persada 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 Total Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Bangun Persada has no effect on the direction of Gozco Plantations i.e., Gozco Plantations and Total Bangun go up and down completely randomly.
Pair Corralation between Gozco Plantations and Total Bangun
Assuming the 90 days trading horizon Gozco Plantations Tbk is expected to generate 1.03 times more return on investment than Total Bangun. However, Gozco Plantations is 1.03 times more volatile than Total Bangun Persada. It trades about 0.01 of its potential returns per unit of risk. Total Bangun Persada is currently generating about -0.21 per unit of risk. If you would invest 10,000 in Gozco Plantations Tbk on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Gozco Plantations Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Total Bangun Persada
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Total Bangun Persada |
Gozco Plantations and Total Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Total Bangun
The main advantage of trading using opposite Gozco Plantations and Total Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations position performs unexpectedly, Total Bangun 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 Total Bangun will offset losses from the drop in Total Bangun's long position.| Gozco Plantations vs. Indofood Cbp Sukses | Gozco Plantations vs. Bank BRISyariah Tbk | Gozco Plantations vs. Mitra Pinasthika Mustika | Gozco Plantations vs. Jakarta Int Hotels |
| Total Bangun vs. Kawasan Industri Jababeka | Total Bangun vs. Adhi Karya Persero | Total Bangun vs. Ciputra Development Tbk | Total Bangun vs. Solusi Bangun Indonesia |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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