Correlation Between Garuda Metalindo and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa Tbk, you can compare the effects of market volatilities on Garuda Metalindo and Indo Kordsa 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 Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Indo Kordsa.
Diversification Opportunities for Garuda Metalindo and Indo Kordsa
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Garuda and Indo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk 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 Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Indo Kordsa go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Indo Kordsa
Assuming the 90 days trading horizon Garuda Metalindo is expected to generate 1.05 times less return on investment than Indo Kordsa. But when comparing it to its historical volatility, Garuda Metalindo Tbk is 1.39 times less risky than Indo Kordsa. It trades about 0.03 of its potential returns per unit of risk. Indo Kordsa Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 579,115 in Indo Kordsa Tbk on August 25, 2024 and sell it today you would earn a total of 3,385 from holding Indo Kordsa Tbk or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Indo Kordsa Tbk |
Garuda Metalindo and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Indo Kordsa
The main advantage of trading using opposite Garuda Metalindo and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa'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 |
| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| CEOs Directory Screen CEOs from public companies around the world |