Correlation Between Perusahaan Gas and Solusi Bangun
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Solusi Bangun 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 Solusi Bangun 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 Solusi Bangun Indonesia, you can compare the effects of market volatilities on Perusahaan Gas and Solusi Bangun 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 Solusi Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Solusi Bangun.
Diversification Opportunities for Perusahaan Gas and Solusi Bangun
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perusahaan and Solusi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Solusi Bangun Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Bangun Indonesia 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 Solusi Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Bangun Indonesia has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Solusi Bangun go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Solusi Bangun
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 1.43 times more return on investment than Solusi Bangun. However, Perusahaan Gas is 1.43 times more volatile than Solusi Bangun Indonesia. It trades about 0.04 of its potential returns per unit of risk. Solusi Bangun Indonesia is currently generating about -0.04 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Solusi Bangun Indonesia
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Solusi Bangun Indonesia |
Perusahaan Gas and Solusi Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Solusi Bangun
The main advantage of trading using opposite Perusahaan Gas and Solusi Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Solusi Bangun 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 Solusi Bangun will offset losses from the drop in Solusi Bangun'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 |
| Solusi Bangun vs. Semen Indonesia Persero | Solusi Bangun vs. Indocement Tunggal Prakarsa | Solusi Bangun vs. Bakrie Sumatera Plantations | Solusi Bangun vs. Timah Persero 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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