Correlation Between Indospring Tbk and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Indospring Tbk and Gajah Tunggal 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 Indospring Tbk and Gajah Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indospring Tbk and Gajah Tunggal Tbk, you can compare the effects of market volatilities on Indospring Tbk and Gajah Tunggal 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 Indospring Tbk with a short position of Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indospring Tbk and Gajah Tunggal.
Diversification Opportunities for Indospring Tbk and Gajah Tunggal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indospring and Gajah is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Indospring Tbk and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal Tbk and Indospring Tbk 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 Indospring Tbk are associated (or correlated) with Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Indospring Tbk i.e., Indospring Tbk and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Indospring Tbk and Gajah Tunggal
Assuming the 90 days trading horizon Indospring Tbk is expected to generate 1.34 times more return on investment than Gajah Tunggal. However, Indospring Tbk is 1.34 times more volatile than Gajah Tunggal Tbk. It trades about 0.03 of its potential returns per unit of risk. Gajah Tunggal Tbk is currently generating about 0.04 per unit of risk. If you would invest 22,661 in Indospring Tbk on August 30, 2024 and sell it today you would earn a total of 1,739 from holding Indospring Tbk or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indospring Tbk vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Indospring Tbk |
| Gajah Tunggal Tbk |
Indospring Tbk and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indospring Tbk and Gajah Tunggal
The main advantage of trading using opposite Indospring Tbk and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indospring Tbk position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts Tbk |
| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom Tbk |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |