Correlation Between Ladangbaja Murni and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Ladangbaja Murni 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 Ladangbaja Murni and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladangbaja Murni PT and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Ladangbaja Murni 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 Ladangbaja Murni with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladangbaja Murni and Gunawan Dianjaya.
Diversification Opportunities for Ladangbaja Murni and Gunawan Dianjaya
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ladangbaja and Gunawan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ladangbaja Murni PT 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 Ladangbaja Murni 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 Ladangbaja Murni PT 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 Ladangbaja Murni i.e., Ladangbaja Murni and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Ladangbaja Murni and Gunawan Dianjaya
Assuming the 90 days trading horizon Ladangbaja Murni PT is expected to generate 1.61 times more return on investment than Gunawan Dianjaya. However, Ladangbaja Murni is 1.61 times more volatile than Gunawan Dianjaya Steel. It trades about 0.07 of its potential returns per unit of risk. Gunawan Dianjaya Steel is currently generating about -0.02 per unit of risk. If you would invest 9,800 in Ladangbaja Murni PT on August 29, 2024 and sell it today you would earn a total of 24,400 from holding Ladangbaja Murni PT or generate 248.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladangbaja Murni PT vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Ladangbaja Murni |
| Gunawan Dianjaya Steel |
Ladangbaja Murni and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladangbaja Murni and Gunawan Dianjaya
The main advantage of trading using opposite Ladangbaja Murni and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladangbaja Murni 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.| Ladangbaja Murni vs. PAM Mineral Tbk | Ladangbaja Murni vs. Nusa Palapa Gemilang | Ladangbaja Murni vs. PT Harapan Duta | Ladangbaja Murni vs. Diagnos Laboratorium Utama |
| Gunawan Dianjaya vs. Barito Pacific Tbk | Gunawan Dianjaya vs. Charoen Pokphand Indonesia | Gunawan Dianjaya vs. Indocement Tunggal Prakarsa |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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