Correlation Between Garuda Metalindo and Mnc Kapital
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Mnc Kapital 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 Mnc Kapital 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 Mnc Kapital Indonesia, you can compare the effects of market volatilities on Garuda Metalindo and Mnc Kapital 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 Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Mnc Kapital.
Diversification Opportunities for Garuda Metalindo and Mnc Kapital
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Garuda and Mnc is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia 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 Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Mnc Kapital go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Mnc Kapital
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.44 times more return on investment than Mnc Kapital. However, Garuda Metalindo Tbk is 2.28 times less risky than Mnc Kapital. It trades about 0.26 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about -0.14 per unit of risk. If you would invest 110,000 in Garuda Metalindo Tbk on September 3, 2024 and sell it today you would earn a total of 12,000 from holding Garuda Metalindo Tbk or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Mnc Kapital Indonesia
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Mnc Kapital Indonesia |
Garuda Metalindo and Mnc Kapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Mnc Kapital
The main advantage of trading using opposite Garuda Metalindo and Mnc Kapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Mnc Kapital 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 Mnc Kapital will offset losses from the drop in Mnc Kapital's long position.| Garuda Metalindo vs. Intanwijaya Internasional Tbk | Garuda Metalindo vs. Champion Pacific Indonesia | Garuda Metalindo vs. Mitra Pinasthika Mustika | Garuda Metalindo vs. Jakarta Int Hotels |
| Mnc Kapital vs. City Retail Developments | Mnc Kapital vs. Pacific Strategic Financial | Mnc Kapital vs. Dharma Polimetal Tbk | Mnc Kapital vs. Ace Hardware Indonesia |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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