Correlation Between PT Gudang and NiSource

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

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

Diversification Opportunities for PT Gudang and NiSource

0.0

Correlation Coefficient

PT Gudang  NiSource

Pay attention - limited upside

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

Pair Corralation between PT Gudang and NiSource

If you would invest  114.00  in PT Gudang Garam on September 28, 2024 and sell it today you would earn a total of  0.00  from holding PT Gudang Garam or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT Gudang Garam  vs.  NiSource

PT Gudang Garam

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Gudang Garam has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Gudang is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

NiSource

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, NiSource may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Gudang and NiSource

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

The idea behind PT Gudang Garam and NiSource 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.