Correlation Between PT Gajah and Zeon

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

Diversification Opportunities for PT Gajah and Zeon

-0.46

Correlation Coefficient

PT Gajah  Zeon

Very good diversification

The 3 months correlation between GH8 and Zeon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PT Gajah Tunggal and Zeon Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeon 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 Zeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeon has no effect on the direction of PT Gajah i.e., PT Gajah and Zeon go up and down completely randomly.

Pair Corralation between PT Gajah and Zeon

Assuming the 90 days horizon PT Gajah Tunggal is expected to under-perform the Zeon. In addition to that, PT Gajah is 3.74 times more volatile than Zeon Corporation. It trades about -0.04 of its total potential returns per unit of risk. Zeon Corporation is currently generating about 0.1 per unit of volatility. If you would invest  885.00  in Zeon Corporation on December 24, 2024 and sell it today you would earn a total of  75.00  from holding Zeon Corporation or generate 8.47% return on investment over 90 days.

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

PT Gajah Tunggal  vs.  Zeon Corp.

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 uncertain 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.

Zeon

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zeon Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zeon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PT Gajah and Zeon

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

The idea behind PT Gajah Tunggal and Zeon Corporation 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.