Correlation Between Garuda Metalindo and Austindo Nusantara
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Austindo Nusantara 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 Austindo Nusantara 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 Austindo Nusantara Jaya, you can compare the effects of market volatilities on Garuda Metalindo and Austindo Nusantara 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 Austindo Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Austindo Nusantara.
Diversification Opportunities for Garuda Metalindo and Austindo Nusantara
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garuda and Austindo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Austindo Nusantara Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austindo Nusantara Jaya 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 Austindo Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austindo Nusantara Jaya has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Austindo Nusantara go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Austindo Nusantara
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to under-perform the Austindo Nusantara. In addition to that, Garuda Metalindo is 1.95 times more volatile than Austindo Nusantara Jaya. It trades about 0.0 of its total potential returns per unit of risk. Austindo Nusantara Jaya is currently generating about 0.01 per unit of volatility. If you would invest 73,000 in Austindo Nusantara Jaya on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Austindo Nusantara Jaya or generate 0.0% 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. Austindo Nusantara Jaya
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Austindo Nusantara Jaya |
Garuda Metalindo and Austindo Nusantara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Austindo Nusantara
The main advantage of trading using opposite Garuda Metalindo and Austindo Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Austindo Nusantara 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 Austindo Nusantara will offset losses from the drop in Austindo Nusantara's long position.| Garuda Metalindo vs. Samudera Indonesia Tbk | Garuda Metalindo vs. Pelayaran Nelly Dwi | Garuda Metalindo vs. Buana Listya Tama | Garuda Metalindo vs. Mitrabahtera Segara Sejati |
| Austindo Nusantara vs. Bakrieland Development Tbk | Austindo Nusantara vs. Bakrie Brothers Tbk | Austindo Nusantara vs. Energi Mega Persada | Austindo Nusantara vs. Sampoerna Agro 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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