Correlation Between Gunung Raja and Mark Dynamics

Can any of the company-specific risk be diversified away by investing in both Gunung Raja and Mark Dynamics 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 Mark Dynamics 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 Mark Dynamics Indonesia, you can compare the effects of market volatilities on Gunung Raja and Mark Dynamics 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 Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunung Raja and Mark Dynamics.

Diversification Opportunities for Gunung Raja and Mark Dynamics

0.9

Correlation Coefficient

Gunung Raja  Mark Dynamics

Almost no diversification

The 3 months correlation between Gunung and Mark is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gunung Raja Paksi and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia 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 Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Gunung Raja i.e., Gunung Raja and Mark Dynamics go up and down completely randomly.

Pair Corralation between Gunung Raja and Mark Dynamics

Assuming the 90 days trading horizon Gunung Raja Paksi is expected to under-perform the Mark Dynamics. In addition to that, Gunung Raja is 1.22 times more volatile than Mark Dynamics Indonesia. It trades about -0.26 of its total potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about -0.15 per unit of volatility. If you would invest  105,500  in Mark Dynamics Indonesia on December 27, 2024 and sell it today you would lose (15,500) from holding Mark Dynamics Indonesia or give up 14.69% of portfolio value over 90 days.

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

Gunung Raja Paksi  vs.  Mark Dynamics Indonesia

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.

Mark Dynamics Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mark Dynamics Indonesia 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 Mark Dynamics

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

The idea behind Gunung Raja Paksi and Mark Dynamics Indonesia 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.