Correlation Between RYMAN HEALTHCAR and PT Gajah

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

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

Diversification Opportunities for RYMAN HEALTHCAR and PT Gajah

0.39

Correlation Coefficient

RYMAN HEALTHCAR  PT Gajah

Weak diversification

The 3 months correlation between RYMAN and GH8 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RYMAN HEALTHCAR and PT Gajah Tunggal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gajah Tunggal and RYMAN HEALTHCAR 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 RYMAN HEALTHCAR are associated (or correlated) with PT Gajah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gajah Tunggal has no effect on the direction of RYMAN HEALTHCAR i.e., RYMAN HEALTHCAR and PT Gajah go up and down completely randomly.

Pair Corralation between RYMAN HEALTHCAR and PT Gajah

Assuming the 90 days trading horizon RYMAN HEALTHCAR is expected to generate 0.3 times more return on investment than PT Gajah. However, RYMAN HEALTHCAR is 3.34 times less risky than PT Gajah. It trades about 0.09 of its potential returns per unit of risk. PT Gajah Tunggal is currently generating about -0.05 per unit of risk. If you would invest  234.00  in RYMAN HEALTHCAR on October 23, 2024 and sell it today you would earn a total of  6.00  from holding RYMAN HEALTHCAR or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

RYMAN HEALTHCAR  vs.  PT Gajah Tunggal

RYMAN HEALTHCAR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RYMAN HEALTHCAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

PT Gajah Tunggal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Gajah Tunggal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PT Gajah reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RYMAN HEALTHCAR and PT Gajah

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

The idea behind RYMAN HEALTHCAR and PT Gajah Tunggal 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.