Correlation Between Grand House and Puri Global

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

By analyzing existing cross correlation between Grand House Mulia and Puri Global Sukses, you can compare the effects of market volatilities on Grand House and Puri Global 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 Grand House with a short position of Puri Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand House and Puri Global.

Diversification Opportunities for Grand House and Puri Global

-0.44

Correlation Coefficient

Grand House  Puri Global

Very good diversification

The 3 months correlation between Grand and Puri is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grand House Mulia and Puri Global Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puri Global Sukses and Grand House 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 Grand House Mulia are associated (or correlated) with Puri Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puri Global Sukses has no effect on the direction of Grand House i.e., Grand House and Puri Global go up and down completely randomly.

Pair Corralation between Grand House and Puri Global

Assuming the 90 days trading horizon Grand House is expected to generate 29.99 times less return on investment than Puri Global. In addition to that, Grand House is 1.01 times more volatile than Puri Global Sukses. It trades about 0.01 of its total potential returns per unit of risk. Puri Global Sukses is currently generating about 0.25 per unit of volatility. If you would invest  22,000  in Puri Global Sukses on October 11, 2024 and sell it today you would earn a total of  5,400  from holding Puri Global Sukses or generate 24.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grand House Mulia  vs.  Puri Global Sukses

Grand House Mulia

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grand House Mulia are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Grand House disclosed solid returns over the last few months and may actually be approaching a breakup point.

Puri Global Sukses

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Puri Global Sukses are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Puri Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grand House and Puri Global

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

The idea behind Grand House Mulia and Puri Global Sukses 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.