Correlation Between Mark Dynamics and Gunung Raja

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

By analyzing existing cross correlation between Mark Dynamics Indonesia and Gunung Raja Paksi, you can compare the effects of market volatilities on Mark Dynamics and Gunung Raja 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 Mark Dynamics with a short position of Gunung Raja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mark Dynamics and Gunung Raja.

Diversification Opportunities for Mark Dynamics and Gunung Raja

0.91

Correlation Coefficient

Mark Dynamics  Gunung Raja

Almost no diversification

The 3 months correlation between Mark and Gunung is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mark Dynamics Indonesia and Gunung Raja Paksi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunung Raja Paksi and Mark Dynamics 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 Mark Dynamics Indonesia are associated (or correlated) with Gunung Raja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunung Raja Paksi has no effect on the direction of Mark Dynamics i.e., Mark Dynamics and Gunung Raja go up and down completely randomly.

Pair Corralation between Mark Dynamics and Gunung Raja

Assuming the 90 days trading horizon Mark Dynamics Indonesia is expected to generate 0.82 times more return on investment than Gunung Raja. However, Mark Dynamics Indonesia is 1.22 times less risky than Gunung Raja. It trades about -0.15 of its potential returns per unit of risk. Gunung Raja Paksi is currently generating about -0.25 per unit of risk. If you would invest  105,500  in Mark Dynamics Indonesia on December 29, 2024 and sell it today you would lose (15,500) from holding Mark Dynamics Indonesia or give up 14.69% of portfolio value over 90 days.

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

Mark Dynamics Indonesia  vs.  Gunung Raja Paksi

Mark Dynamics Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mark Dynamics Indonesia 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.

Gunung Raja Paksi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gunung Raja Paksi 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 Mark Dynamics and Gunung Raja

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

The idea behind Mark Dynamics Indonesia and Gunung Raja Paksi 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.