Correlation Between Repower Asia and Grand House

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

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

Diversification Opportunities for Repower Asia and Grand House

0.0

Correlation Coefficient

Repower Asia  Grand House

Pay attention - limited upside

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

Pair Corralation between Repower Asia and Grand House

If you would invest  0.00  in Repower Asia Indonesia on December 31, 2024 and sell it today you would earn a total of  0.00  from holding Repower Asia Indonesia or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Repower Asia Indonesia  vs.  Grand House Mulia

Repower Asia Indonesia

Risk-Adjusted Performance

Good

Over the last 90 days Repower Asia Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Repower Asia is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Grand House Mulia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grand House Mulia 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.

Pair Trading with Repower Asia and Grand House

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

The idea behind Repower Asia Indonesia and Grand House Mulia 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.