Correlation Between GoTo Gojek and PT Sarana

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

By analyzing existing cross correlation between GoTo Gojek Tokopedia and PT Sarana Menara, you can compare the effects of market volatilities on GoTo Gojek and PT Sarana 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 GoTo Gojek with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoTo Gojek and PT Sarana.

Diversification Opportunities for GoTo Gojek and PT Sarana

0.07

Correlation Coefficient

GoTo Gojek  PT Sarana

Significant diversification

The 3 months correlation between GoTo and TOWR is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GoTo Gojek Tokopedia and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara and GoTo Gojek 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 GoTo Gojek Tokopedia are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of GoTo Gojek i.e., GoTo Gojek and PT Sarana go up and down completely randomly.

Pair Corralation between GoTo Gojek and PT Sarana

Assuming the 90 days trading horizon GoTo Gojek Tokopedia is expected to generate 1.26 times more return on investment than PT Sarana. However, GoTo Gojek is 1.26 times more volatile than PT Sarana Menara. It trades about -0.19 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.41 per unit of risk. If you would invest  8,100  in GoTo Gojek Tokopedia on December 2, 2024 and sell it today you would lose (800.00) from holding GoTo Gojek Tokopedia or give up 9.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GoTo Gojek Tokopedia  vs.  PT Sarana Menara

GoTo Gojek Tokopedia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GoTo Gojek Tokopedia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, GoTo Gojek may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PT Sarana Menara

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sarana Menara 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 forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GoTo Gojek and PT Sarana

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

The idea behind GoTo Gojek Tokopedia and PT Sarana Menara 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.