Correlation Between Perusahaan Gas and Unilever Indonesia
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Unilever 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 Unilever 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 Unilever Indonesia Tbk, you can compare the effects of market volatilities on Perusahaan Gas and Unilever 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 Unilever Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Unilever Indonesia.
Diversification Opportunities for Perusahaan Gas and Unilever Indonesia
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perusahaan and Unilever is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Unilever Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever 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 Unilever Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Indonesia Tbk has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Unilever Indonesia go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Unilever Indonesia
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 0.62 times more return on investment than Unilever Indonesia. However, Perusahaan Gas Negara is 1.62 times less risky than Unilever Indonesia. It trades about -0.08 of its potential returns per unit of risk. Unilever Indonesia Tbk is currently generating about -0.43 per unit of risk. If you would invest 155,000 in Perusahaan Gas Negara on August 24, 2024 and sell it today you would lose (5,000) from holding Perusahaan Gas Negara or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Unilever Indonesia Tbk
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Unilever Indonesia Tbk |
Perusahaan Gas and Unilever Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Unilever Indonesia
The main advantage of trading using opposite Perusahaan Gas and Unilever Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Unilever 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 Unilever Indonesia will offset losses from the drop in Unilever 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 |
| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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