Correlation Between Impack Pratama and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Impack Pratama and Gunawan Dianjaya 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 Impack Pratama and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impack Pratama Industri and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Impack Pratama and Gunawan Dianjaya 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 Impack Pratama with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impack Pratama and Gunawan Dianjaya.
Diversification Opportunities for Impack Pratama and Gunawan Dianjaya
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Impack and Gunawan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Impack Pratama Industri and Gunawan Dianjaya Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunawan Dianjaya Steel and Impack Pratama 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 Impack Pratama Industri are associated (or correlated) with Gunawan Dianjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunawan Dianjaya Steel has no effect on the direction of Impack Pratama i.e., Impack Pratama and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Impack Pratama and Gunawan Dianjaya
Assuming the 90 days trading horizon Impack Pratama Industri is expected to generate 0.39 times more return on investment than Gunawan Dianjaya. However, Impack Pratama Industri is 2.53 times less risky than Gunawan Dianjaya. It trades about 0.02 of its potential returns per unit of risk. Gunawan Dianjaya Steel is currently generating about -0.31 per unit of risk. If you would invest 33,400 in Impack Pratama Industri on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Impack Pratama Industri or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impack Pratama Industri vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Impack Pratama Industri |
| Gunawan Dianjaya Steel |
Impack Pratama and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impack Pratama and Gunawan Dianjaya
The main advantage of trading using opposite Impack Pratama and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impack Pratama position performs unexpectedly, Gunawan Dianjaya 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 Gunawan Dianjaya will offset losses from the drop in Gunawan Dianjaya's long position.| Impack Pratama vs. Medikaloka Hermina PT | Impack Pratama vs. Lotte Chemical Titan | Impack Pratama vs. Mark Dynamics Indonesia | Impack Pratama vs. Garudafood Putra Putri |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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