Correlation Between Gunawan Dianjaya and Trias Sentosa

Can any of the company-specific risk be diversified away by investing in both Gunawan Dianjaya and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Gunawan Dianjaya and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunawan Dianjaya and Trias Sentosa.

Diversification Opportunities for Gunawan Dianjaya and Trias Sentosa

-0.37

Correlation Coefficient

Gunawan Dianjaya  Trias Sentosa

Very good diversification

The 3 months correlation between Gunawan and Trias is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gunawan Dianjaya Steel and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa Tbk 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Gunawan Dianjaya i.e., Gunawan Dianjaya and Trias Sentosa go up and down completely randomly.

Pair Corralation between Gunawan Dianjaya and Trias Sentosa

Assuming the 90 days trading horizon Gunawan Dianjaya Steel is expected to under-perform the Trias Sentosa. In addition to that, Gunawan Dianjaya is 1.8 times more volatile than Trias Sentosa Tbk. It trades about -0.17 of its total potential returns per unit of risk. Trias Sentosa Tbk is currently generating about 0.01 per unit of volatility. If you would invest  49,800  in Trias Sentosa Tbk on September 5, 2024 and sell it today you would earn a total of  200.00  from holding Trias Sentosa Tbk or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Gunawan Dianjaya Steel  vs.  Trias Sentosa Tbk

Gunawan Dianjaya Steel

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Trias Sentosa Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gunawan Dianjaya and Trias Sentosa

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

The idea behind Gunawan Dianjaya Steel and Trias Sentosa Tbk 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.