Correlation Between GUDANG GARAM and Kyocera

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

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

Diversification Opportunities for GUDANG GARAM and Kyocera

-0.83

Correlation Coefficient

GUDANG GARAM  Kyocera

Pay attention - limited upside

The 3 months correlation between GUDANG and Kyocera is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and Kyocera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyocera and GUDANG GARAM 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 GUDANG GARAM are associated (or correlated) with Kyocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyocera has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and Kyocera go up and down completely randomly.

Pair Corralation between GUDANG GARAM and Kyocera

Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the Kyocera. In addition to that, GUDANG GARAM is 1.43 times more volatile than Kyocera. It trades about -0.18 of its total potential returns per unit of risk. Kyocera is currently generating about 0.09 per unit of volatility. If you would invest  914.00  in Kyocera on December 30, 2024 and sell it today you would earn a total of  90.00  from holding Kyocera or generate 9.85% return on investment over 90 days.

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

GUDANG GARAM  vs.  Kyocera

GUDANG GARAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days GUDANG GARAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kyocera

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kyocera are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kyocera may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GUDANG GARAM and Kyocera

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

The idea behind GUDANG GARAM and Kyocera 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.