Correlation Between Garuda Metalindo and Dharma Polimetal
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Dharma Polimetal 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 Dharma Polimetal 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 Dharma Polimetal Tbk, you can compare the effects of market volatilities on Garuda Metalindo and Dharma Polimetal 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 Dharma Polimetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Dharma Polimetal.
Diversification Opportunities for Garuda Metalindo and Dharma Polimetal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Garuda and Dharma is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Dharma Polimetal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Polimetal 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 Dharma Polimetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Polimetal Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Dharma Polimetal go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Dharma Polimetal
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 2.01 times more return on investment than Dharma Polimetal. However, Garuda Metalindo is 2.01 times more volatile than Dharma Polimetal Tbk. It trades about 0.16 of its potential returns per unit of risk. Dharma Polimetal Tbk is currently generating about -0.13 per unit of risk. If you would invest 112,000 in Garuda Metalindo Tbk on August 31, 2024 and sell it today you would earn a total of 10,000 from holding Garuda Metalindo Tbk or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Dharma Polimetal Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Dharma Polimetal Tbk |
Garuda Metalindo and Dharma Polimetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Dharma Polimetal
The main advantage of trading using opposite Garuda Metalindo and Dharma Polimetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Dharma Polimetal 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 Dharma Polimetal will offset losses from the drop in Dharma Polimetal'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 |
| Dharma Polimetal vs. Triputra Agro Persada | Dharma Polimetal vs. Autopedia Sukses Lestari | Dharma Polimetal vs. Cisarua Mountain Dairy | Dharma Polimetal vs. Surya Esa Perkasa |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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