Correlation Between GTS Internasional and PAM Mineral

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

By analyzing existing cross correlation between GTS Internasional Tbk and PAM Mineral Tbk, you can compare the effects of market volatilities on GTS Internasional and PAM Mineral 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 GTS Internasional with a short position of PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTS Internasional and PAM Mineral.

Diversification Opportunities for GTS Internasional and PAM Mineral

-0.26

Correlation Coefficient

GTS Internasional  PAM Mineral

Very good diversification

The 3 months correlation between GTS and PAM is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GTS Internasional Tbk and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk and GTS Internasional 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 GTS Internasional Tbk are associated (or correlated) with PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of GTS Internasional i.e., GTS Internasional and PAM Mineral go up and down completely randomly.

Pair Corralation between GTS Internasional and PAM Mineral

Assuming the 90 days trading horizon GTS Internasional Tbk is expected to under-perform the PAM Mineral. In addition to that, GTS Internasional is 1.27 times more volatile than PAM Mineral Tbk. It trades about 0.0 of its total potential returns per unit of risk. PAM Mineral Tbk is currently generating about 0.06 per unit of volatility. If you would invest  26,162  in PAM Mineral Tbk on September 16, 2024 and sell it today you would earn a total of  1,838  from holding PAM Mineral Tbk or generate 7.03% return on investment over 90 days.

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

GTS Internasional Tbk  vs.  PAM Mineral Tbk

GTS Internasional Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

PAM Mineral Tbk

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PAM Mineral Tbk are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PAM Mineral may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GTS Internasional and PAM Mineral

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

The idea behind GTS Internasional Tbk and PAM Mineral Tbk 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.