Correlation Between Impack Pratama and Gunung Raja
Can any of the company-specific risk be diversified away by investing in both Impack Pratama and Gunung Raja 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 Gunung Raja 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 Gunung Raja Paksi, you can compare the effects of market volatilities on Impack Pratama and Gunung Raja 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 Gunung Raja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impack Pratama and Gunung Raja.
Diversification Opportunities for Impack Pratama and Gunung Raja
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Impack and Gunung is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Impack Pratama Industri and Gunung Raja Paksi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunung Raja Paksi 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 Gunung Raja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunung Raja Paksi has no effect on the direction of Impack Pratama i.e., Impack Pratama and Gunung Raja go up and down completely randomly.
Pair Corralation between Impack Pratama and Gunung Raja
Assuming the 90 days trading horizon Impack Pratama is expected to generate 10.48 times less return on investment than Gunung Raja. But when comparing it to its historical volatility, Impack Pratama Industri is 15.46 times less risky than Gunung Raja. It trades about 0.02 of its potential returns per unit of risk. Gunung Raja Paksi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28,500 in Gunung Raja Paksi on September 1, 2024 and sell it today you would lose (7,300) from holding Gunung Raja Paksi or give up 25.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Impack Pratama Industri vs. Gunung Raja Paksi
Performance |
| Timeline |
| Impack Pratama Industri |
| Gunung Raja Paksi |
Impack Pratama and Gunung Raja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impack Pratama and Gunung Raja
The main advantage of trading using opposite Impack Pratama and Gunung Raja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impack Pratama position performs unexpectedly, Gunung Raja 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 Gunung Raja will offset losses from the drop in Gunung Raja's long position.| Impack Pratama vs. Perusahaan Gas Negara | Impack Pratama vs. Telkom Indonesia Tbk | Impack Pratama vs. Mitra Pinasthika Mustika | Impack Pratama vs. Jakarta Int Hotels |
| Gunung Raja vs. Gunawan Dianjaya Steel | Gunung Raja vs. Steel Pipe Industry | Gunung Raja vs. Impack Pratama Industri | Gunung Raja vs. Ifishdeco PT |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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