Correlation Between GTS Internasional and Trans Power

Can any of the company-specific risk be diversified away by investing in both GTS Internasional and Trans Power 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 Trans Power 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 Trans Power Marine, you can compare the effects of market volatilities on GTS Internasional and Trans Power 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 Trans Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTS Internasional and Trans Power.

Diversification Opportunities for GTS Internasional and Trans Power

0.43

Correlation Coefficient

GTS Internasional  Trans Power

Very weak diversification

The 3 months correlation between GTS and Trans is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GTS Internasional Tbk and Trans Power Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Power Marine 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 Trans Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Power Marine has no effect on the direction of GTS Internasional i.e., GTS Internasional and Trans Power go up and down completely randomly.

Pair Corralation between GTS Internasional and Trans Power

Assuming the 90 days trading horizon GTS Internasional Tbk is expected to generate 1.31 times more return on investment than Trans Power. However, GTS Internasional is 1.31 times more volatile than Trans Power Marine. It trades about 0.0 of its potential returns per unit of risk. Trans Power Marine is currently generating about -0.05 per unit of risk. If you would invest  3,400  in GTS Internasional Tbk on September 16, 2024 and sell it today you would lose (100.00) from holding GTS Internasional Tbk or give up 2.94% of portfolio value over 90 days.

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

GTS Internasional Tbk  vs.  Trans Power Marine

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.

Trans Power Marine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trans Power Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with GTS Internasional and Trans Power

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

The idea behind GTS Internasional Tbk and Trans Power Marine 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.