Correlation Between Garuda Metalindo and Maming Enam
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Maming Enam 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 Garuda Metalindo and Maming Enam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garuda Metalindo Tbk and Maming Enam Sembilan, you can compare the effects of market volatilities on Garuda Metalindo and Maming Enam 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 Garuda Metalindo with a short position of Maming Enam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Maming Enam.
Diversification Opportunities for Garuda Metalindo and Maming Enam
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garuda and Maming is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Maming Enam Sembilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maming Enam Sembilan and Garuda Metalindo 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 Garuda Metalindo Tbk are associated (or correlated) with Maming Enam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maming Enam Sembilan has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Maming Enam go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Maming Enam
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.61 times more return on investment than Maming Enam. However, Garuda Metalindo Tbk is 1.64 times less risky than Maming Enam. It trades about 0.06 of its potential returns per unit of risk. Maming Enam Sembilan is currently generating about -0.18 per unit of risk. If you would invest 116,500 in Garuda Metalindo Tbk on August 27, 2024 and sell it today you would earn a total of 3,500 from holding Garuda Metalindo Tbk or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Maming Enam Sembilan
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Maming Enam Sembilan |
Garuda Metalindo and Maming Enam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Maming Enam
The main advantage of trading using opposite Garuda Metalindo and Maming Enam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Maming Enam 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 Maming Enam will offset losses from the drop in Maming Enam's long position.| Garuda Metalindo vs. Indo Kordsa Tbk | Garuda Metalindo vs. Indospring Tbk | Garuda Metalindo vs. Kabelindo Murni Tbk | Garuda Metalindo vs. Blue Bird Tbk |
| Maming Enam vs. Lion Metal Works | Maming Enam vs. Diamond Food Indonesia | Maming Enam vs. Trinitan Metals and | Maming Enam vs. Garuda Metalindo 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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