Correlation Between GoTo Gojek and Gozco Plantations

Can any of the company-specific risk be diversified away by investing in both GoTo Gojek and Gozco Plantations 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 GoTo Gojek and Gozco Plantations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GoTo Gojek Tokopedia and Gozco Plantations Tbk, you can compare the effects of market volatilities on GoTo Gojek and Gozco Plantations 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 GoTo Gojek with a short position of Gozco Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoTo Gojek and Gozco Plantations.

Diversification Opportunities for GoTo Gojek and Gozco Plantations

0.79

Correlation Coefficient

GoTo Gojek  Gozco Plantations

Poor diversification

The 3 months correlation between GoTo and Gozco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GoTo Gojek Tokopedia and Gozco Plantations Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gozco Plantations Tbk and GoTo Gojek 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 GoTo Gojek Tokopedia are associated (or correlated) with Gozco Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gozco Plantations Tbk has no effect on the direction of GoTo Gojek i.e., GoTo Gojek and Gozco Plantations go up and down completely randomly.

Pair Corralation between GoTo Gojek and Gozco Plantations

Assuming the 90 days trading horizon GoTo Gojek Tokopedia is expected to generate 0.79 times more return on investment than Gozco Plantations. However, GoTo Gojek Tokopedia is 1.26 times less risky than Gozco Plantations. It trades about -0.22 of its potential returns per unit of risk. Gozco Plantations Tbk is currently generating about -0.32 per unit of risk. If you would invest  6,900  in GoTo Gojek Tokopedia on January 28, 2024 and sell it today you would lose (700.00) from holding GoTo Gojek Tokopedia or give up 10.14% of portfolio value over 90 days.

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

GoTo Gojek Tokopedia  vs.  Gozco Plantations Tbk

GoTo Gojek Tokopedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoTo Gojek Tokopedia 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 basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Gozco Plantations Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gozco Plantations Tbk 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 basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GoTo Gojek and Gozco Plantations

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

The idea behind GoTo Gojek Tokopedia and Gozco Plantations 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..