Correlation Between Gaya Abadi and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Gaya Abadi and Lancartama Sejati 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 Lancartama Sejati 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 Lancartama Sejati Tbk, you can compare the effects of market volatilities on Gaya Abadi and Lancartama Sejati 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 Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaya Abadi and Lancartama Sejati.
Diversification Opportunities for Gaya Abadi and Lancartama Sejati
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaya and Lancartama is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gaya Abadi Sempurna and Lancartama Sejati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancartama Sejati Tbk 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 Lancartama Sejati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancartama Sejati Tbk has no effect on the direction of Gaya Abadi i.e., Gaya Abadi and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Gaya Abadi and Lancartama Sejati
Assuming the 90 days trading horizon Gaya Abadi Sempurna is expected to under-perform the Lancartama Sejati. But the stock apears to be less risky and, when comparing its historical volatility, Gaya Abadi Sempurna is 1.37 times less risky than Lancartama Sejati. The stock trades about -0.07 of its potential returns per unit of risk. The Lancartama Sejati Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,900 in Lancartama Sejati Tbk on September 12, 2024 and sell it today you would lose (2,400) from holding Lancartama Sejati Tbk or give up 61.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaya Abadi Sempurna vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Gaya Abadi Sempurna |
| Lancartama Sejati Tbk |
Gaya Abadi and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaya Abadi and Lancartama Sejati
The main advantage of trading using opposite Gaya Abadi and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaya Abadi position performs unexpectedly, Lancartama Sejati 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 Lancartama Sejati will offset losses from the drop in Lancartama Sejati's long position.| Gaya Abadi vs. Pollux Properti Indonesia | Gaya Abadi vs. Medikaloka Hermina PT | Gaya Abadi vs. Trisula Textile Industries | Gaya Abadi vs. Mitrabara Adiperdana PT |
| Lancartama Sejati vs. Perintis Triniti Properti | Lancartama Sejati vs. Diamond Citra Propertindo | Lancartama Sejati vs. Karya Bersama Anugerah | Lancartama Sejati vs. Pratama Widya 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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