Correlation Between Gaya Abadi and Champ Resto
Can any of the company-specific risk be diversified away by investing in both Gaya Abadi and Champ Resto 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 Champ Resto 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 Champ Resto Indonesia, you can compare the effects of market volatilities on Gaya Abadi and Champ Resto 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 Champ Resto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaya Abadi and Champ Resto.
Diversification Opportunities for Gaya Abadi and Champ Resto
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaya and Champ is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gaya Abadi Sempurna and Champ Resto Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champ Resto 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 Champ Resto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champ Resto Indonesia has no effect on the direction of Gaya Abadi i.e., Gaya Abadi and Champ Resto go up and down completely randomly.
Pair Corralation between Gaya Abadi and Champ Resto
Assuming the 90 days trading horizon Gaya Abadi Sempurna is expected to under-perform the Champ Resto. But the stock apears to be less risky and, when comparing its historical volatility, Gaya Abadi Sempurna is 3.65 times less risky than Champ Resto. The stock trades about -0.4 of its potential returns per unit of risk. The Champ Resto Indonesia is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 55,500 in Champ Resto Indonesia on August 27, 2024 and sell it today you would lose (3,500) from holding Champ Resto Indonesia or give up 6.31% 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. Champ Resto Indonesia
Performance |
| Timeline |
| Gaya Abadi Sempurna |
| Champ Resto Indonesia |
Gaya Abadi and Champ Resto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaya Abadi and Champ Resto
The main advantage of trading using opposite Gaya Abadi and Champ Resto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaya Abadi position performs unexpectedly, Champ Resto 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 Champ Resto will offset losses from the drop in Champ Resto's long position.| Gaya Abadi vs. Multipolar Technology Tbk | Gaya Abadi vs. Nusantara Voucher Distribution | Gaya Abadi vs. Hensel Davest Indonesia | Gaya Abadi vs. Anabatic Technologies Tbk |
| Champ Resto vs. PT Dewi Shri | Champ Resto vs. Bangun Karya Perkasa | Champ Resto vs. Gaya Abadi Sempurna | Champ Resto vs. Habco Trans Maritima |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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