Correlation Between Guna Timur and Armada Berjaya
Can any of the company-specific risk be diversified away by investing in both Guna Timur and Armada Berjaya 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 Armada Berjaya 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 Armada Berjaya Trans, you can compare the effects of market volatilities on Guna Timur and Armada Berjaya 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 Armada Berjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guna Timur and Armada Berjaya.
Diversification Opportunities for Guna Timur and Armada Berjaya
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guna and Armada is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and Armada Berjaya Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Berjaya Trans 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 Armada Berjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Berjaya Trans has no effect on the direction of Guna Timur i.e., Guna Timur and Armada Berjaya go up and down completely randomly.
Pair Corralation between Guna Timur and Armada Berjaya
Assuming the 90 days trading horizon Guna Timur Raya is expected to generate 1.58 times more return on investment than Armada Berjaya. However, Guna Timur is 1.58 times more volatile than Armada Berjaya Trans. It trades about 0.03 of its potential returns per unit of risk. Armada Berjaya Trans is currently generating about -0.01 per unit of risk. If you would invest 9,000 in Guna Timur Raya on November 4, 2024 and sell it today you would earn a total of 1,200 from holding Guna Timur Raya or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guna Timur Raya vs. Armada Berjaya Trans
Performance |
| Timeline |
| Guna Timur Raya |
| Armada Berjaya Trans |
Guna Timur and Armada Berjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guna Timur and Armada Berjaya
The main advantage of trading using opposite Guna Timur and Armada Berjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guna Timur position performs unexpectedly, Armada Berjaya 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 Armada Berjaya will offset losses from the drop in Armada Berjaya's long position.| Guna Timur vs. Sriwahana | Guna Timur vs. PT Trimuda Nuansa | Guna Timur vs. Yelooo Integra Datanet | Guna Timur vs. Transcoal Pacific Tbk |
| Armada Berjaya vs. Guna Timur Raya | Armada Berjaya vs. Sinergi Inti Plastindo | Armada Berjaya vs. Hartadinata Abadi Tbk | Armada Berjaya vs. Weha Transportasi Indonesia |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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