Correlation Between Alphabet and Graha Layar

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

By analyzing existing cross correlation between Alphabet Inc Class C and Graha Layar Prima, you can compare the effects of market volatilities on Alphabet and Graha Layar 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 Alphabet with a short position of Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Graha Layar.

Diversification Opportunities for Alphabet and Graha Layar

0.72

Correlation Coefficient

Alphabet  Graha Layar

Poor diversification

The 3 months correlation between Alphabet and Graha is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Alphabet i.e., Alphabet and Graha Layar go up and down completely randomly.

Pair Corralation between Alphabet and Graha Layar

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Graha Layar. In addition to that, Alphabet is 1.51 times more volatile than Graha Layar Prima. It trades about -0.12 of its total potential returns per unit of risk. Graha Layar Prima is currently generating about -0.13 per unit of volatility. If you would invest  200,000  in Graha Layar Prima on December 29, 2024 and sell it today you would lose (20,000) from holding Graha Layar Prima or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Alphabet Inc Class C  vs.  Graha Layar Prima

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting 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.

Graha Layar Prima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graha Layar Prima 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 Alphabet and Graha Layar

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

The idea behind Alphabet Inc Class C and Graha Layar Prima 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.