Correlation Between Gozco Plantations and Transkon Jaya
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations and Transkon Jaya 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 Transkon Jaya 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 Transkon Jaya Pt, you can compare the effects of market volatilities on Gozco Plantations and Transkon Jaya 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 Transkon Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Transkon Jaya.
Diversification Opportunities for Gozco Plantations and Transkon Jaya
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gozco and Transkon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations Tbk and Transkon Jaya Pt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transkon Jaya Pt 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 Transkon Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transkon Jaya Pt has no effect on the direction of Gozco Plantations i.e., Gozco Plantations and Transkon Jaya go up and down completely randomly.
Pair Corralation between Gozco Plantations and Transkon Jaya
Assuming the 90 days trading horizon Gozco Plantations Tbk is expected to generate 1.66 times more return on investment than Transkon Jaya. However, Gozco Plantations is 1.66 times more volatile than Transkon Jaya Pt. It trades about 0.05 of its potential returns per unit of risk. Transkon Jaya Pt is currently generating about 0.09 per unit of risk. If you would invest 8,600 in Gozco Plantations Tbk on September 3, 2024 and sell it today you would earn a total of 1,300 from holding Gozco Plantations Tbk or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Transkon Jaya Pt
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Transkon Jaya Pt |
Gozco Plantations and Transkon Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Transkon Jaya
The main advantage of trading using opposite Gozco Plantations and Transkon Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations position performs unexpectedly, Transkon Jaya 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 Transkon Jaya will offset losses from the drop in Transkon Jaya'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 |
| Transkon Jaya vs. Pelayaran Nelly Dwi | Transkon Jaya vs. Guna Timur Raya | Transkon Jaya vs. Batavia Prosperindo Trans | Transkon Jaya vs. PT Trimuda Nuansa |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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