Correlation Between Guna Timur and PT Indonesia
Can any of the company-specific risk be diversified away by investing in both Guna Timur and PT Indonesia 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 Guna Timur and PT Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guna Timur Raya and PT Indonesia Kendaraan, you can compare the effects of market volatilities on Guna Timur and PT Indonesia 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 Guna Timur with a short position of PT Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guna Timur and PT Indonesia.
Diversification Opportunities for Guna Timur and PT Indonesia
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guna and IPCC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and PT Indonesia Kendaraan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indonesia Kendaraan and Guna Timur 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 Guna Timur Raya are associated (or correlated) with PT Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indonesia Kendaraan has no effect on the direction of Guna Timur i.e., Guna Timur and PT Indonesia go up and down completely randomly.
Pair Corralation between Guna Timur and PT Indonesia
Assuming the 90 days trading horizon Guna Timur Raya is expected to under-perform the PT Indonesia. In addition to that, Guna Timur is 3.84 times more volatile than PT Indonesia Kendaraan. It trades about -0.01 of its total potential returns per unit of risk. PT Indonesia Kendaraan is currently generating about 0.23 per unit of volatility. If you would invest 71,000 in PT Indonesia Kendaraan on August 30, 2024 and sell it today you would earn a total of 4,000 from holding PT Indonesia Kendaraan or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guna Timur Raya vs. PT Indonesia Kendaraan
Performance |
| Timeline |
| Guna Timur Raya |
| PT Indonesia Kendaraan |
Guna Timur and PT Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guna Timur and PT Indonesia
The main advantage of trading using opposite Guna Timur and PT Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guna Timur position performs unexpectedly, PT Indonesia 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 PT Indonesia will offset losses from the drop in PT Indonesia's long position.| Guna Timur vs. Sinergi Inti Plastindo | Guna Timur vs. Hartadinata Abadi Tbk | Guna Timur vs. Weha Transportasi Indonesia | Guna Timur vs. Dewata Freight International |
| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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