Correlation Between Gajah Tunggal and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Gajah Tunggal and Wahana Pronatural 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 Gajah Tunggal and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gajah Tunggal Tbk and Wahana Pronatural, you can compare the effects of market volatilities on Gajah Tunggal and Wahana Pronatural 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 Gajah Tunggal with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gajah Tunggal and Wahana Pronatural.
Diversification Opportunities for Gajah Tunggal and Wahana Pronatural
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gajah and Wahana is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gajah Tunggal Tbk and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Gajah Tunggal 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 Gajah Tunggal Tbk are associated (or correlated) with Wahana Pronatural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Pronatural has no effect on the direction of Gajah Tunggal i.e., Gajah Tunggal and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Gajah Tunggal and Wahana Pronatural
Assuming the 90 days trading horizon Gajah Tunggal Tbk is expected to generate 0.31 times more return on investment than Wahana Pronatural. However, Gajah Tunggal Tbk is 3.2 times less risky than Wahana Pronatural. It trades about -0.02 of its potential returns per unit of risk. Wahana Pronatural is currently generating about -0.11 per unit of risk. If you would invest 117,500 in Gajah Tunggal Tbk on November 24, 2024 and sell it today you would lose (1,000.00) from holding Gajah Tunggal Tbk or give up 0.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gajah Tunggal Tbk vs. Wahana Pronatural
Performance |
Timeline |
Gajah Tunggal Tbk |
Wahana Pronatural |
Gajah Tunggal and Wahana Pronatural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gajah Tunggal and Wahana Pronatural
The main advantage of trading using opposite Gajah Tunggal and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gajah Tunggal position performs unexpectedly, Wahana Pronatural 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 Wahana Pronatural will offset losses from the drop in Wahana Pronatural's long position.Gajah Tunggal vs. Matahari Putra Prima | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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