Correlation Between Gunung Raja and Aneka Gas

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

By analyzing existing cross correlation between Gunung Raja Paksi and Aneka Gas Industri, you can compare the effects of market volatilities on Gunung Raja and Aneka Gas 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 Gunung Raja with a short position of Aneka Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunung Raja and Aneka Gas.

Diversification Opportunities for Gunung Raja and Aneka Gas

0.58

Correlation Coefficient

Gunung Raja  Aneka Gas

Very weak diversification

The 3 months correlation between Gunung and Aneka is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gunung Raja Paksi and Aneka Gas Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Gas Industri and Gunung Raja 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 Gunung Raja Paksi are associated (or correlated) with Aneka Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Gas Industri has no effect on the direction of Gunung Raja i.e., Gunung Raja and Aneka Gas go up and down completely randomly.

Pair Corralation between Gunung Raja and Aneka Gas

Assuming the 90 days trading horizon Gunung Raja Paksi is expected to under-perform the Aneka Gas. But the stock apears to be less risky and, when comparing its historical volatility, Gunung Raja Paksi is 1.31 times less risky than Aneka Gas. The stock trades about -0.26 of its potential returns per unit of risk. The Aneka Gas Industri is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  143,000  in Aneka Gas Industri on December 27, 2024 and sell it today you would lose (23,500) from holding Aneka Gas Industri or give up 16.43% of portfolio value over 90 days.

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

Gunung Raja Paksi  vs.  Aneka Gas Industri

Gunung Raja Paksi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gunung Raja Paksi 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aneka Gas Industri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aneka Gas Industri 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Gunung Raja and Aneka Gas

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

The idea behind Gunung Raja Paksi and Aneka Gas Industri 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.