Correlation Between Gunawan Dianjaya and Saraswanti Anugerah

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

By analyzing existing cross correlation between Gunawan Dianjaya Steel and Saraswanti Anugerah Makmur, you can compare the effects of market volatilities on Gunawan Dianjaya and Saraswanti Anugerah 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 Gunawan Dianjaya with a short position of Saraswanti Anugerah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunawan Dianjaya and Saraswanti Anugerah.

Diversification Opportunities for Gunawan Dianjaya and Saraswanti Anugerah

0.11

Correlation Coefficient

Gunawan Dianjaya  Saraswanti Anugerah

Average diversification

The 3 months correlation between Gunawan and Saraswanti is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gunawan Dianjaya Steel and Saraswanti Anugerah Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saraswanti Anugerah and Gunawan Dianjaya 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 Gunawan Dianjaya Steel are associated (or correlated) with Saraswanti Anugerah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saraswanti Anugerah has no effect on the direction of Gunawan Dianjaya i.e., Gunawan Dianjaya and Saraswanti Anugerah go up and down completely randomly.

Pair Corralation between Gunawan Dianjaya and Saraswanti Anugerah

Assuming the 90 days trading horizon Gunawan Dianjaya Steel is expected to under-perform the Saraswanti Anugerah. But the stock apears to be less risky and, when comparing its historical volatility, Gunawan Dianjaya Steel is 3.67 times less risky than Saraswanti Anugerah. The stock trades about -0.26 of its potential returns per unit of risk. The Saraswanti Anugerah Makmur is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  38,750  in Saraswanti Anugerah Makmur on December 2, 2024 and sell it today you would lose (5,150) from holding Saraswanti Anugerah Makmur or give up 13.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gunawan Dianjaya Steel  vs.  Saraswanti Anugerah Makmur

Gunawan Dianjaya Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gunawan Dianjaya Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Gunawan Dianjaya is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Saraswanti Anugerah

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saraswanti Anugerah Makmur has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Gunawan Dianjaya and Saraswanti Anugerah

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

The idea behind Gunawan Dianjaya Steel and Saraswanti Anugerah Makmur 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.