Correlation Between PT Trimuda and Guna Timur

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

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

Diversification Opportunities for PT Trimuda and Guna Timur

0.63

Correlation Coefficient

PT Trimuda  Guna Timur

Poor diversification

The 3 months correlation between TNCA and Guna is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Trimuda Nuansa and Guna Timur Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guna Timur Raya and PT Trimuda 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 Trimuda Nuansa are associated (or correlated) with Guna Timur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guna Timur Raya has no effect on the direction of PT Trimuda i.e., PT Trimuda and Guna Timur go up and down completely randomly.

Pair Corralation between PT Trimuda and Guna Timur

Assuming the 90 days trading horizon PT Trimuda Nuansa is expected to under-perform the Guna Timur. In addition to that, PT Trimuda is 2.02 times more volatile than Guna Timur Raya. It trades about -0.08 of its total potential returns per unit of risk. Guna Timur Raya is currently generating about -0.07 per unit of volatility. If you would invest  10,300  in Guna Timur Raya on September 15, 2024 and sell it today you would lose (2,100) from holding Guna Timur Raya or give up 20.39% of portfolio value over 90 days.

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

PT Trimuda Nuansa  vs.  Guna Timur Raya

PT Trimuda Nuansa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Trimuda Nuansa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Guna Timur Raya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guna Timur Raya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT Trimuda and Guna Timur

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

The idea behind PT Trimuda Nuansa and Guna Timur Raya 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.