Correlation Between Pelat Timah and Gunawan Dianjaya
Can any of the company-specific risk be diversified away by investing in both Pelat Timah 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 Pelat Timah and Gunawan Dianjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelat Timah Nusantara and Gunawan Dianjaya Steel, you can compare the effects of market volatilities on Pelat Timah 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 Pelat Timah with a short position of Gunawan Dianjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelat Timah and Gunawan Dianjaya.
Diversification Opportunities for Pelat Timah and Gunawan Dianjaya
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pelat and Gunawan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pelat Timah Nusantara 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 Pelat Timah 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 Pelat Timah Nusantara 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 Pelat Timah i.e., Pelat Timah and Gunawan Dianjaya go up and down completely randomly.
Pair Corralation between Pelat Timah and Gunawan Dianjaya
Assuming the 90 days trading horizon Pelat Timah Nusantara is expected to generate 1.49 times more return on investment than Gunawan Dianjaya. However, Pelat Timah is 1.49 times more volatile than Gunawan Dianjaya Steel. It trades about -0.01 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 41,800 in Pelat Timah Nusantara on August 31, 2024 and sell it today you would lose (15,800) from holding Pelat Timah Nusantara or give up 37.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pelat Timah Nusantara vs. Gunawan Dianjaya Steel
Performance |
| Timeline |
| Pelat Timah Nusantara |
| Gunawan Dianjaya Steel |
Pelat Timah and Gunawan Dianjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pelat Timah and Gunawan Dianjaya
The main advantage of trading using opposite Pelat Timah and Gunawan Dianjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelat Timah 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.| Pelat Timah vs. Krakatau Steel Persero | Pelat Timah vs. Delta Dunia Makmur | Pelat Timah vs. Semen Baturaja Persero | Pelat Timah vs. Indofarma Tbk |
| Gunawan Dianjaya vs. Perusahaan Gas Negara | Gunawan Dianjaya vs. Vale Indonesia Tbk | Gunawan Dianjaya vs. Telkom Indonesia Tbk | Gunawan Dianjaya vs. Mitra Pinasthika Mustika |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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