Correlation Between Trias Sentosa and Perusahaan Gas
Can any of the company-specific risk be diversified away by investing in both Trias Sentosa and Perusahaan Gas 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 Trias Sentosa and Perusahaan Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and Perusahaan Gas Negara, you can compare the effects of market volatilities on Trias Sentosa and Perusahaan Gas 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 Trias Sentosa with a short position of Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Perusahaan Gas.
Diversification Opportunities for Trias Sentosa and Perusahaan Gas
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trias and Perusahaan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Perusahaan Gas Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Gas Negara and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with Perusahaan Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Gas Negara has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Perusahaan Gas go up and down completely randomly.
Pair Corralation between Trias Sentosa and Perusahaan Gas
Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to under-perform the Perusahaan Gas. But the stock apears to be less risky and, when comparing its historical volatility, Trias Sentosa Tbk is 1.59 times less risky than Perusahaan Gas. The stock trades about -0.48 of its potential returns per unit of risk. The Perusahaan Gas Negara is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 163,000 in Perusahaan Gas Negara on December 1, 2024 and sell it today you would lose (11,500) from holding Perusahaan Gas Negara or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trias Sentosa Tbk vs. Perusahaan Gas Negara
Performance |
| Timeline |
| Trias Sentosa Tbk |
| Perusahaan Gas Negara |
Trias Sentosa and Perusahaan Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trias Sentosa and Perusahaan Gas
The main advantage of trading using opposite Trias Sentosa and Perusahaan Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa position performs unexpectedly, Perusahaan Gas 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 Perusahaan Gas will offset losses from the drop in Perusahaan Gas' long position.| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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