Correlation Between INSURANCE AUST and PT Gudang
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and PT Gudang 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 INSURANCE AUST and PT Gudang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and PT Gudang Garam, you can compare the effects of market volatilities on INSURANCE AUST and PT Gudang 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 INSURANCE AUST with a short position of PT Gudang. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and PT Gudang.
Diversification Opportunities for INSURANCE AUST and PT Gudang
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INSURANCE and GGG is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and PT Gudang Garam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gudang Garam and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with PT Gudang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gudang Garam has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and PT Gudang go up and down completely randomly.
Pair Corralation between INSURANCE AUST and PT Gudang
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.28 times more return on investment than PT Gudang. However, INSURANCE AUST GRP is 3.62 times less risky than PT Gudang. It trades about 0.12 of its potential returns per unit of risk. PT Gudang Garam is currently generating about 0.0 per unit of risk. If you would invest 324.00 in INSURANCE AUST GRP on September 14, 2024 and sell it today you would earn a total of 181.00 from holding INSURANCE AUST GRP or generate 55.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. PT Gudang Garam
Performance |
| Timeline |
| INSURANCE AUST GRP |
| PT Gudang Garam |
INSURANCE AUST and PT Gudang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and PT Gudang
The main advantage of trading using opposite INSURANCE AUST and PT Gudang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, PT Gudang 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 PT Gudang will offset losses from the drop in PT Gudang's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
| PT Gudang vs. SCANSOURCE | PT Gudang vs. INSURANCE AUST GRP | PT Gudang vs. ScanSource | PT Gudang vs. The Hanover Insurance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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