Correlation Between Hero Supermarket and Graha Layar

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

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

Diversification Opportunities for Hero Supermarket and Graha Layar

0.12

Correlation Coefficient

Hero Supermarket  Graha Layar

Average diversification

The 3 months correlation between Hero and Graha is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hero Supermarket Tbk 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 Hero Supermarket 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 Hero Supermarket Tbk 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 Hero Supermarket i.e., Hero Supermarket and Graha Layar go up and down completely randomly.

Pair Corralation between Hero Supermarket and Graha Layar

Assuming the 90 days trading horizon Hero Supermarket Tbk is expected to under-perform the Graha Layar. In addition to that, Hero Supermarket is 1.67 times more volatile than Graha Layar Prima. It trades about -0.09 of its total potential returns per unit of risk. Graha Layar Prima is currently generating about 0.05 per unit of volatility. If you would invest  192,500  in Graha Layar Prima on September 14, 2024 and sell it today you would earn a total of  7,500  from holding Graha Layar Prima or generate 3.9% return on investment over 90 days.

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

Hero Supermarket Tbk  vs.  Graha Layar Prima

Hero Supermarket Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hero Supermarket Tbk 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.

Graha Layar Prima

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graha Layar Prima are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Graha Layar 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 Hero Supermarket and Graha Layar

The main advantage of trading using opposite Hero Supermarket and Graha Layar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hero Supermarket 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 Hero Supermarket Tbk 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.