Correlation Between Guna Timur and Transcoal Pacific
Can any of the company-specific risk be diversified away by investing in both Guna Timur and Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific Tbk, you can compare the effects of market volatilities on Guna Timur and Transcoal Pacific 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 Transcoal Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guna Timur and Transcoal Pacific.
Diversification Opportunities for Guna Timur and Transcoal Pacific
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guna and Transcoal is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and Transcoal Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcoal Pacific Tbk 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 Transcoal Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcoal Pacific Tbk has no effect on the direction of Guna Timur i.e., Guna Timur and Transcoal Pacific go up and down completely randomly.
Pair Corralation between Guna Timur and Transcoal Pacific
Assuming the 90 days trading horizon Guna Timur Raya is expected to under-perform the Transcoal Pacific. In addition to that, Guna Timur is 4.58 times more volatile than Transcoal Pacific Tbk. It trades about -0.14 of its total potential returns per unit of risk. Transcoal Pacific Tbk is currently generating about 0.11 per unit of volatility. If you would invest 707,500 in Transcoal Pacific Tbk on August 31, 2024 and sell it today you would earn a total of 20,000 from holding Transcoal Pacific Tbk or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guna Timur Raya vs. Transcoal Pacific Tbk
Performance |
| Timeline |
| Guna Timur Raya |
| Transcoal Pacific Tbk |
Guna Timur and Transcoal Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guna Timur and Transcoal Pacific
The main advantage of trading using opposite Guna Timur and Transcoal Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guna Timur position performs unexpectedly, Transcoal Pacific 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 Transcoal Pacific will offset losses from the drop in Transcoal Pacific'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 |
| Transcoal Pacific vs. Matahari Department Store | Transcoal Pacific vs. Multi Medika Internasional | Transcoal Pacific vs. Visi Media Asia | Transcoal Pacific vs. Bayan Resources 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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