Correlation Between Gaya Abadi and Lima Dua

Can any of the company-specific risk be diversified away by investing in both Gaya Abadi and Lima Dua 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 Gaya Abadi and Lima Dua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gaya Abadi Sempurna and Lima Dua Lima, you can compare the effects of market volatilities on Gaya Abadi and Lima Dua 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 Gaya Abadi with a short position of Lima Dua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaya Abadi and Lima Dua.

Diversification Opportunities for Gaya Abadi and Lima Dua

-0.47

Correlation Coefficient

Gaya Abadi  Lima Dua

Very good diversification

The 3 months correlation between Gaya and Lima is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gaya Abadi Sempurna and Lima Dua Lima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lima Dua Lima and Gaya Abadi 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 Gaya Abadi Sempurna are associated (or correlated) with Lima Dua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lima Dua Lima has no effect on the direction of Gaya Abadi i.e., Gaya Abadi and Lima Dua go up and down completely randomly.

Pair Corralation between Gaya Abadi and Lima Dua

Assuming the 90 days trading horizon Gaya Abadi Sempurna is expected to generate 0.18 times more return on investment than Lima Dua. However, Gaya Abadi Sempurna is 5.59 times less risky than Lima Dua. It trades about 0.0 of its potential returns per unit of risk. Lima Dua Lima is currently generating about -0.11 per unit of risk. If you would invest  5,000  in Gaya Abadi Sempurna on December 3, 2024 and sell it today you would earn a total of  0.00  from holding Gaya Abadi Sempurna or generate 0.0% return on investment over 90 days.

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

Gaya Abadi Sempurna  vs.  Lima Dua Lima

Gaya Abadi Sempurna

Risk-Adjusted Performance

Very Weak

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

Lima Dua Lima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lima Dua Lima 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 Gaya Abadi and Lima Dua

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

The idea behind Gaya Abadi Sempurna and Lima Dua Lima 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..