Correlation Between Perusahaan Gas and Colorpak Indonesia
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Colorpak 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 Colorpak 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 Colorpak Indonesia Tbk, you can compare the effects of market volatilities on Perusahaan Gas and Colorpak 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 Colorpak Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Colorpak Indonesia.
Diversification Opportunities for Perusahaan Gas and Colorpak Indonesia
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perusahaan and Colorpak is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Colorpak Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colorpak 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 Colorpak Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colorpak Indonesia Tbk has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Colorpak Indonesia go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Colorpak Indonesia
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 4.14 times more return on investment than Colorpak Indonesia. However, Perusahaan Gas is 4.14 times more volatile than Colorpak Indonesia Tbk. It trades about -0.05 of its potential returns per unit of risk. Colorpak Indonesia Tbk is currently generating about -0.24 per unit of risk. If you would invest 156,500 in Perusahaan Gas Negara on September 1, 2024 and sell it today you would lose (4,000) from holding Perusahaan Gas Negara or give up 2.56% 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. Colorpak Indonesia Tbk
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Colorpak Indonesia Tbk |
Perusahaan Gas and Colorpak Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Colorpak Indonesia
The main advantage of trading using opposite Perusahaan Gas and Colorpak Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Colorpak 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 Colorpak Indonesia will offset losses from the drop in Colorpak 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 |
| Colorpak Indonesia vs. Perusahaan Gas Negara | Colorpak Indonesia vs. Telkom Indonesia Tbk | Colorpak Indonesia vs. Mitra Pinasthika Mustika | Colorpak Indonesia 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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