Correlation Between Solusi Bangun and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Solusi Bangun and Gajah Tunggal 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 Solusi Bangun and Gajah Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solusi Bangun Indonesia and Gajah Tunggal Tbk, you can compare the effects of market volatilities on Solusi Bangun and Gajah Tunggal 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 Solusi Bangun with a short position of Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solusi Bangun and Gajah Tunggal.
Diversification Opportunities for Solusi Bangun and Gajah Tunggal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solusi and Gajah is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Solusi Bangun Indonesia and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal Tbk and Solusi Bangun 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 Solusi Bangun Indonesia are associated (or correlated) with Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Solusi Bangun i.e., Solusi Bangun and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Solusi Bangun and Gajah Tunggal
Assuming the 90 days trading horizon Solusi Bangun Indonesia is expected to under-perform the Gajah Tunggal. But the stock apears to be less risky and, when comparing its historical volatility, Solusi Bangun Indonesia is 2.06 times less risky than Gajah Tunggal. The stock trades about -0.13 of its potential returns per unit of risk. The Gajah Tunggal Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 121,000 in Gajah Tunggal Tbk on August 28, 2024 and sell it today you would lose (4,000) from holding Gajah Tunggal Tbk or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solusi Bangun Indonesia vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Solusi Bangun Indonesia |
| Gajah Tunggal Tbk |
Solusi Bangun and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solusi Bangun and Gajah Tunggal
The main advantage of trading using opposite Solusi Bangun and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solusi Bangun position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal's long position.| Solusi Bangun vs. Kedaung Indah Can | Solusi Bangun vs. Langgeng Makmur Industri | Solusi Bangun vs. Kabelindo Murni Tbk | Solusi Bangun vs. Mustika Ratu Tbk |
| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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