Correlation Between GM and Asuransi Bina

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

By analyzing existing cross correlation between General Motors and Asuransi Bina Dana, you can compare the effects of market volatilities on GM and Asuransi Bina 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 GM with a short position of Asuransi Bina. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Asuransi Bina.

Diversification Opportunities for GM and Asuransi Bina

-0.28

Correlation Coefficient

GM  Asuransi Bina

Very good diversification

The 3 months correlation between GM and Asuransi is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Asuransi Bina Dana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bina Dana and GM 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 General Motors are associated (or correlated) with Asuransi Bina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bina Dana has no effect on the direction of GM i.e., GM and Asuransi Bina go up and down completely randomly.

Pair Corralation between GM and Asuransi Bina

If you would invest  5,180  in General Motors on September 4, 2024 and sell it today you would earn a total of  324.00  from holding General Motors or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

General Motors  vs.  Asuransi Bina Dana

General Motors

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

Asuransi Bina Dana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Bina Dana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with GM and Asuransi Bina

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

The idea behind General Motors and Asuransi Bina Dana 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.