Correlation Between ANT and PT Gajah

Can any of the company-specific risk be diversified away by investing in both ANT and PT Gajah 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 ANT and PT Gajah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and PT Gajah Tunggal, you can compare the effects of market volatilities on ANT and PT Gajah 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 ANT with a short position of PT Gajah. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and PT Gajah.

Diversification Opportunities for ANT and PT Gajah

0.04

Correlation Coefficient

ANT  PT Gajah

Significant diversification

The 3 months correlation between ANT and GH8 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ANT and PT Gajah Tunggal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gajah Tunggal and ANT 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 ANT are associated (or correlated) with PT Gajah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gajah Tunggal has no effect on the direction of ANT i.e., ANT and PT Gajah go up and down completely randomly.

Pair Corralation between ANT and PT Gajah

Assuming the 90 days trading horizon ANT is expected to generate 5.81 times more return on investment than PT Gajah. However, ANT is 5.81 times more volatile than PT Gajah Tunggal. It trades about 0.1 of its potential returns per unit of risk. PT Gajah Tunggal is currently generating about 0.07 per unit of risk. If you would invest  298.00  in ANT on October 11, 2024 and sell it today you would lose (151.00) from holding ANT or give up 50.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.4%
Values	Daily Returns

ANT  vs.  PT Gajah Tunggal

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

PT Gajah Tunggal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Gajah Tunggal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Gajah reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and PT Gajah

The main advantage of trading using opposite ANT and PT Gajah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, PT Gajah 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 Gajah will offset losses from the drop in PT Gajah's long position.

The idea behind ANT and PT Gajah Tunggal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.