Correlation Between PT Gajah and Transport International

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

By analyzing existing cross correlation between PT Gajah Tunggal and Transport International Holdings, you can compare the effects of market volatilities on PT Gajah and Transport International 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 PT Gajah with a short position of Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gajah and Transport International.

Diversification Opportunities for PT Gajah and Transport International

0.06

Correlation Coefficient

PT Gajah  Transport International

Significant diversification

The 3 months correlation between GH8 and Transport is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Gajah Tunggal and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International and PT Gajah 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 PT Gajah Tunggal are associated (or correlated) with Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of PT Gajah i.e., PT Gajah and Transport International go up and down completely randomly.

Pair Corralation between PT Gajah and Transport International

Assuming the 90 days horizon PT Gajah Tunggal is expected to under-perform the Transport International. In addition to that, PT Gajah is 2.99 times more volatile than Transport International Holdings. It trades about -0.06 of its total potential returns per unit of risk. Transport International Holdings is currently generating about -0.01 per unit of volatility. If you would invest  96.00  in Transport International Holdings on December 20, 2024 and sell it today you would lose (2.00) from holding Transport International Holdings or give up 2.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

PT Gajah Tunggal  vs.  Transport International Holdin

PT Gajah Tunggal

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Gajah Tunggal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Transport International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transport International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Gajah and Transport International

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

The idea behind PT Gajah Tunggal and Transport International Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.