Correlation Between PT Semen and GSE Systems

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

By analyzing existing cross correlation between PT Semen Indonesia and GSE Systems, you can compare the effects of market volatilities on PT Semen and GSE Systems 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 PT Semen with a short position of GSE Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Semen and GSE Systems.

Diversification Opportunities for PT Semen and GSE Systems

0.0

Correlation Coefficient

PT Semen  GSE Systems

Pay attention - limited upside

The 3 months correlation between PSGTF and GSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and GSE Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSE Systems and PT Semen 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 PT Semen Indonesia are associated (or correlated) with GSE Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSE Systems has no effect on the direction of PT Semen i.e., PT Semen and GSE Systems go up and down completely randomly.

Pair Corralation between PT Semen and GSE Systems

If you would invest (100.00) in GSE Systems on December 26, 2024 and sell it today you would earn a total of  100.00  from holding GSE Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Semen Indonesia  vs.  GSE Systems

PT Semen Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

GSE Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days GSE Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GSE Systems is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Semen and GSE Systems

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

The idea behind PT Semen Indonesia and GSE Systems 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.