Correlation Between Guna Timur and Krida Jaringan

Can any of the company-specific risk be diversified away by investing in both Guna Timur and Krida Jaringan 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 Guna Timur and Krida Jaringan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guna Timur Raya and Krida Jaringan Nusantara, you can compare the effects of market volatilities on Guna Timur and Krida Jaringan 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 Guna Timur with a short position of Krida Jaringan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guna Timur and Krida Jaringan.

Diversification Opportunities for Guna Timur and Krida Jaringan

-0.44

Correlation Coefficient

Guna Timur  Krida Jaringan

Very good diversification

The 3 months correlation between Guna and Krida is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and Krida Jaringan Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krida Jaringan Nusantara and Guna Timur 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 Guna Timur Raya are associated (or correlated) with Krida Jaringan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krida Jaringan Nusantara has no effect on the direction of Guna Timur i.e., Guna Timur and Krida Jaringan go up and down completely randomly.

Pair Corralation between Guna Timur and Krida Jaringan

Assuming the 90 days trading horizon Guna Timur Raya is expected to generate 0.3 times more return on investment than Krida Jaringan. However, Guna Timur Raya is 3.28 times less risky than Krida Jaringan. It trades about 0.18 of its potential returns per unit of risk. Krida Jaringan Nusantara is currently generating about -0.12 per unit of risk. If you would invest  8,400  in Guna Timur Raya on December 29, 2024 and sell it today you would earn a total of  2,400  from holding Guna Timur Raya or generate 28.57% return on investment over 90 days.

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

Guna Timur Raya  vs.  Krida Jaringan Nusantara

Guna Timur Raya

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guna Timur Raya are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Guna Timur disclosed solid returns over the last few months and may actually be approaching a breakup point.

Krida Jaringan Nusantara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Krida Jaringan Nusantara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Guna Timur and Krida Jaringan

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

The idea behind Guna Timur Raya and Krida Jaringan Nusantara 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.