Correlation Between Guna Timur and Satria Antaran

Can any of the company-specific risk be diversified away by investing in both Guna Timur and Satria Antaran 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 Satria Antaran 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 Satria Antaran Prima, you can compare the effects of market volatilities on Guna Timur and Satria Antaran 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 Satria Antaran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guna Timur and Satria Antaran.

Diversification Opportunities for Guna Timur and Satria Antaran

0.6

Correlation Coefficient

Guna Timur  Satria Antaran

Poor diversification

The 3 months correlation between Guna and Satria is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Guna Timur Raya and Satria Antaran Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satria Antaran Prima 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 Satria Antaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satria Antaran Prima has no effect on the direction of Guna Timur i.e., Guna Timur and Satria Antaran go up and down completely randomly.

Pair Corralation between Guna Timur and Satria Antaran

Assuming the 90 days trading horizon Guna Timur Raya is expected to generate 0.45 times more return on investment than Satria Antaran. However, Guna Timur Raya is 2.22 times less risky than Satria Antaran. It trades about -0.07 of its potential returns per unit of risk. Satria Antaran Prima is currently generating about -0.09 per unit of risk. If you would invest  10,400  in Guna Timur Raya on September 29, 2024 and sell it today you would lose (2,200) from holding Guna Timur Raya or give up 21.15% 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.  Satria Antaran Prima

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.

Satria Antaran Prima

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satria Antaran Prima 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 Guna Timur and Satria Antaran

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

The idea behind Guna Timur Raya and Satria Antaran Prima 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.