Correlation Between PT Gudang and 808 Renewable

Can any of the company-specific risk be diversified away by investing in both PT Gudang and 808 Renewable 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 808 Renewable 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 808 Renewable Energy, you can compare the effects of market volatilities on PT Gudang and 808 Renewable 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 808 Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gudang and 808 Renewable.

Diversification Opportunities for PT Gudang and 808 Renewable

1.0

Correlation Coefficient

PT Gudang  808 Renewable

No risk reduction

The 3 months correlation between GGNPF and 808 is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Gudang Garam and 808 Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 808 Renewable Energy 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 808 Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 808 Renewable Energy has no effect on the direction of PT Gudang i.e., PT Gudang and 808 Renewable go up and down completely randomly.

Pair Corralation between PT Gudang and 808 Renewable

If you would invest  0.01  in 808 Renewable Energy on September 12, 2024 and sell it today you would earn a total of  0.00  from holding 808 Renewable Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

PT Gudang Garam  vs.  808 Renewable Energy

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

808 Renewable Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 808 Renewable Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, 808 Renewable is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Gudang and 808 Renewable

The main advantage of trading using opposite PT Gudang and 808 Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Gudang position performs unexpectedly, 808 Renewable 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 808 Renewable will offset losses from the drop in 808 Renewable's long position.

The idea behind PT Gudang Garam and 808 Renewable Energy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.