Correlation Between Guna Timur and Hartadinata Abadi

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

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

Diversification Opportunities for Guna Timur and Hartadinata Abadi

0.78

Correlation Coefficient

Guna Timur  Hartadinata Abadi

Poor diversification

The 3 months correlation between Guna and Hartadinata is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk and Guna Timur 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 Guna Timur Raya are associated (or correlated) with Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Guna Timur i.e., Guna Timur and Hartadinata Abadi go up and down completely randomly.

Pair Corralation between Guna Timur and Hartadinata Abadi

Assuming the 90 days trading horizon Guna Timur Raya is expected to under-perform the Hartadinata Abadi. In addition to that, Guna Timur is 1.56 times more volatile than Hartadinata Abadi Tbk. It trades about -0.07 of its total potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about -0.04 per unit of volatility. If you would invest  38,600  in Hartadinata Abadi Tbk on September 16, 2024 and sell it today you would lose (3,200) from holding Hartadinata Abadi Tbk or give up 8.29% of portfolio value over 90 days.

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

Guna Timur Raya  vs.  Hartadinata Abadi Tbk

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.

Hartadinata Abadi Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartadinata Abadi Tbk 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 Guna Timur and Hartadinata Abadi

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

The idea behind Guna Timur Raya and Hartadinata Abadi 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.