Correlation Between Unggul Indah and Perusahaan Gas
Can any of the company-specific risk be diversified away by investing in both Unggul Indah 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 Unggul Indah and Perusahaan Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Perusahaan Gas Negara, you can compare the effects of market volatilities on Unggul Indah 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 Unggul Indah with a short position of Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Perusahaan Gas.
Diversification Opportunities for Unggul Indah and Perusahaan Gas
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unggul and Perusahaan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya 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 Unggul Indah 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 Unggul Indah Cahaya 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 Unggul Indah i.e., Unggul Indah and Perusahaan Gas go up and down completely randomly.
Pair Corralation between Unggul Indah and Perusahaan Gas
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to under-perform the Perusahaan Gas. But the stock apears to be less risky and, when comparing its historical volatility, Unggul Indah Cahaya is 5.2 times less risky than Perusahaan Gas. The stock trades about -0.08 of its potential returns per unit of risk. The Perusahaan Gas Negara is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 151,000 in Perusahaan Gas Negara on September 3, 2024 and sell it today you would earn a total of 1,500 from holding Perusahaan Gas Negara or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Perusahaan Gas Negara
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Perusahaan Gas Negara |
Unggul Indah and Perusahaan Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Perusahaan Gas
The main advantage of trading using opposite Unggul Indah and Perusahaan Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah 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.| Unggul Indah vs. Trias Sentosa Tbk | Unggul Indah vs. Suparma Tbk | Unggul Indah vs. Tembaga Mulia Semanan | Unggul Indah vs. Surya Toto Indonesia |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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