Correlation Between Perusahaan Gas and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Alumindo Light 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 Alumindo Light 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 Alumindo Light Metal, you can compare the effects of market volatilities on Perusahaan Gas and Alumindo Light 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 Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Alumindo Light.
Diversification Opportunities for Perusahaan Gas and Alumindo Light
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perusahaan and Alumindo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal 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 Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Alumindo Light go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Alumindo Light
If you would invest 151,000 in Perusahaan Gas Negara on September 3, 2024 and sell it today you would earn a total of 1,500 from holding Perusahaan Gas Negara or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Alumindo Light Metal
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Alumindo Light Metal |
Perusahaan Gas and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Alumindo Light
The main advantage of trading using opposite Perusahaan Gas and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light'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 |
| Alumindo Light vs. Timah Persero Tbk | Alumindo Light vs. Semen Indonesia Persero | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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