Correlation Between GM and Jasuindo Tiga

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

By analyzing existing cross correlation between General Motors and Jasuindo Tiga Perkasa, you can compare the effects of market volatilities on GM and Jasuindo Tiga 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 Jasuindo Tiga. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jasuindo Tiga.

Diversification Opportunities for GM and Jasuindo Tiga

-0.39

Correlation Coefficient

GM  Jasuindo Tiga

Very good diversification

The 3 months correlation between GM and Jasuindo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jasuindo Tiga Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasuindo Tiga Perkasa 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 Jasuindo Tiga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasuindo Tiga Perkasa has no effect on the direction of GM i.e., GM and Jasuindo Tiga go up and down completely randomly.

Pair Corralation between GM and Jasuindo Tiga

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Jasuindo Tiga. In addition to that, GM is 2.7 times more volatile than Jasuindo Tiga Perkasa. It trades about -0.03 of its total potential returns per unit of risk. Jasuindo Tiga Perkasa is currently generating about -0.03 per unit of volatility. If you would invest  22,000  in Jasuindo Tiga Perkasa on December 27, 2024 and sell it today you would lose (400.00) from holding Jasuindo Tiga Perkasa or give up 1.82% of portfolio value over 90 days.

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

General Motors  vs.  Jasuindo Tiga Perkasa

General Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Jasuindo Tiga Perkasa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jasuindo Tiga Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Jasuindo Tiga is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with GM and Jasuindo Tiga

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

The idea behind General Motors and Jasuindo Tiga Perkasa 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 Stocks Directory module to find actively traded stocks across global markets.