Correlation Between Perusahaan Gas and Polychem Indonesia
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Polychem Indonesia 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 Perusahaan Gas and Polychem Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Polychem Indonesia Tbk, you can compare the effects of market volatilities on Perusahaan Gas and Polychem Indonesia 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 Perusahaan Gas with a short position of Polychem Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Polychem Indonesia.
Diversification Opportunities for Perusahaan Gas and Polychem Indonesia
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perusahaan and Polychem is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Polychem Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polychem Indonesia Tbk and Perusahaan Gas 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 Perusahaan Gas Negara are associated (or correlated) with Polychem Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polychem Indonesia Tbk has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Polychem Indonesia go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Polychem Indonesia
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to under-perform the Polychem Indonesia. In addition to that, Perusahaan Gas is 2.06 times more volatile than Polychem Indonesia Tbk. It trades about -0.16 of its total potential returns per unit of risk. Polychem Indonesia Tbk is currently generating about -0.13 per unit of volatility. If you would invest 10,800 in Polychem Indonesia Tbk on December 1, 2024 and sell it today you would lose (300.00) from holding Polychem Indonesia Tbk or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Polychem Indonesia Tbk
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Polychem Indonesia Tbk |
Perusahaan Gas and Polychem Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Polychem Indonesia
The main advantage of trading using opposite Perusahaan Gas and Polychem Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Polychem Indonesia 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 Polychem Indonesia will offset losses from the drop in Polychem Indonesia's long position.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| Polychem Indonesia vs. Gajah Tunggal Tbk | Polychem Indonesia vs. Astra Graphia Tbk | Polychem Indonesia vs. Citra Marga Nusaphala | Polychem Indonesia vs. Sentul City 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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