Correlation Between Gaya Abadi and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both Gaya Abadi and Adaro Minerals 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 Gaya Abadi and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaya Abadi Sempurna and Adaro Minerals Indonesia, you can compare the effects of market volatilities on Gaya Abadi and Adaro Minerals 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 Gaya Abadi with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaya Abadi and Adaro Minerals.
Diversification Opportunities for Gaya Abadi and Adaro Minerals
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaya and Adaro is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gaya Abadi Sempurna and Adaro Minerals Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Minerals Indonesia and Gaya Abadi 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 Gaya Abadi Sempurna are associated (or correlated) with Adaro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Minerals Indonesia has no effect on the direction of Gaya Abadi i.e., Gaya Abadi and Adaro Minerals go up and down completely randomly.
Pair Corralation between Gaya Abadi and Adaro Minerals
Assuming the 90 days trading horizon Gaya Abadi Sempurna is expected to under-perform the Adaro Minerals. In addition to that, Gaya Abadi is 1.51 times more volatile than Adaro Minerals Indonesia. It trades about -0.03 of its total potential returns per unit of risk. Adaro Minerals Indonesia is currently generating about 0.0 per unit of volatility. If you would invest 137,000 in Adaro Minerals Indonesia on September 3, 2024 and sell it today you would lose (10,500) from holding Adaro Minerals Indonesia or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaya Abadi Sempurna vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| Gaya Abadi Sempurna |
| Adaro Minerals Indonesia |
Gaya Abadi and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaya Abadi and Adaro Minerals
The main advantage of trading using opposite Gaya Abadi and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaya Abadi position performs unexpectedly, Adaro Minerals 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 Adaro Minerals will offset losses from the drop in Adaro Minerals' long position.| Gaya Abadi vs. Pollux Properti Indonesia | Gaya Abadi vs. MNC Vision Networks | Gaya Abadi vs. Medikaloka Hermina PT | Gaya Abadi vs. Surya Permata Andalan |
| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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