Correlation Between Garuda Metalindo and Electronic City
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Electronic City 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 Electronic City 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 Electronic City Indonesia, you can compare the effects of market volatilities on Garuda Metalindo and Electronic City 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 Electronic City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Electronic City.
Diversification Opportunities for Garuda Metalindo and Electronic City
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Garuda and Electronic is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Electronic City Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic City 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 Electronic City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic City Indonesia has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Electronic City go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Electronic City
Assuming the 90 days trading horizon Garuda Metalindo is expected to generate 1.74 times less return on investment than Electronic City. But when comparing it to its historical volatility, Garuda Metalindo Tbk is 3.78 times less risky than Electronic City. It trades about 0.15 of its potential returns per unit of risk. Electronic City Indonesia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 24,400 in Electronic City Indonesia on August 30, 2024 and sell it today you would earn a total of 4,200 from holding Electronic City Indonesia or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Electronic City Indonesia
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Electronic City Indonesia |
Garuda Metalindo and Electronic City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Electronic City
The main advantage of trading using opposite Garuda Metalindo and Electronic City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Electronic City 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 Electronic City will offset losses from the drop in Electronic City'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 |
| Electronic City vs. Catur Sentosa Adiprana | Electronic City vs. Fast Food Indonesia | Electronic City vs. Hero Supermarket Tbk | Electronic City vs. Graha Layar Prima |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Directory Find actively traded commodities issued by global exchanges |