Correlation Between Victoria Insurance and Geoprima Solusi
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and Geoprima Solusi 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 Victoria Insurance and Geoprima Solusi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victoria Insurance Tbk and Geoprima Solusi Tbk, you can compare the effects of market volatilities on Victoria Insurance and Geoprima Solusi 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 Victoria Insurance with a short position of Geoprima Solusi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Geoprima Solusi.
Diversification Opportunities for Victoria Insurance and Geoprima Solusi
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Victoria and Geoprima is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Geoprima Solusi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geoprima Solusi Tbk and Victoria Insurance 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 Victoria Insurance Tbk are associated (or correlated) with Geoprima Solusi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geoprima Solusi Tbk has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Geoprima Solusi go up and down completely randomly.
Pair Corralation between Victoria Insurance and Geoprima Solusi
Assuming the 90 days trading horizon Victoria Insurance is expected to generate 1.98 times less return on investment than Geoprima Solusi. In addition to that, Victoria Insurance is 1.14 times more volatile than Geoprima Solusi Tbk. It trades about 0.03 of its total potential returns per unit of risk. Geoprima Solusi Tbk is currently generating about 0.07 per unit of volatility. If you would invest 12,300 in Geoprima Solusi Tbk on September 3, 2024 and sell it today you would earn a total of 23,300 from holding Geoprima Solusi Tbk or generate 189.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. Geoprima Solusi Tbk
Performance |
| Timeline |
| Victoria Insurance Tbk |
| Geoprima Solusi Tbk |
Victoria Insurance and Geoprima Solusi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and Geoprima Solusi
The main advantage of trading using opposite Victoria Insurance and Geoprima Solusi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance position performs unexpectedly, Geoprima Solusi 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 Geoprima Solusi will offset losses from the drop in Geoprima Solusi's long position.| Victoria Insurance vs. Paninvest Tbk | Victoria Insurance vs. Mitra Pinasthika Mustika | Victoria Insurance vs. Jakarta Int Hotels | Victoria Insurance vs. Asuransi Harta Aman |
| Geoprima Solusi vs. Integra Indocabinet Tbk | Geoprima Solusi vs. Multistrada Arah Sarana | Geoprima Solusi vs. PT MNC Energy | Geoprima Solusi vs. J Resources Asia |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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