Correlation Between Abm Investama and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Abm Investama and Garuda Metalindo 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 Abm Investama and Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abm Investama Tbk and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Abm Investama and Garuda Metalindo 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 Abm Investama with a short position of Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abm Investama and Garuda Metalindo.
Diversification Opportunities for Abm Investama and Garuda Metalindo
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abm and Garuda is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Abm Investama Tbk and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk and Abm Investama 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 Abm Investama Tbk are associated (or correlated) with Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Abm Investama i.e., Abm Investama and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Abm Investama and Garuda Metalindo
Assuming the 90 days trading horizon Abm Investama Tbk is expected to under-perform the Garuda Metalindo. But the stock apears to be less risky and, when comparing its historical volatility, Abm Investama Tbk is 1.18 times less risky than Garuda Metalindo. The stock trades about -0.24 of its potential returns per unit of risk. The Garuda Metalindo Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 116,500 in Garuda Metalindo Tbk on August 29, 2024 and sell it today you would lose (1,000.00) from holding Garuda Metalindo Tbk or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abm Investama Tbk vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Abm Investama Tbk |
| Garuda Metalindo Tbk |
Abm Investama and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abm Investama and Garuda Metalindo
The main advantage of trading using opposite Abm Investama and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abm Investama position performs unexpectedly, Garuda Metalindo 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 Garuda Metalindo will offset losses from the drop in Garuda Metalindo's long position.| Abm Investama vs. Baramulti Suksessarana Tbk | Abm Investama vs. Mitrabara Adiperdana PT | Abm Investama vs. Sumber Alfaria Trijaya | Abm Investama vs. Surya Esa Perkasa |
| Garuda Metalindo vs. Indo Kordsa Tbk | Garuda Metalindo vs. Indospring Tbk | Garuda Metalindo vs. Kabelindo Murni Tbk | Garuda Metalindo vs. Blue Bird Tbk |
Check out your portfolio center.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.
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