Correlation Between Garuda Metalindo and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Inocycle Technology 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 Inocycle Technology 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 Inocycle Technology Tbk, you can compare the effects of market volatilities on Garuda Metalindo and Inocycle Technology 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 Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Inocycle Technology.
Diversification Opportunities for Garuda Metalindo and Inocycle Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Garuda and Inocycle is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology 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 Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Inocycle Technology go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Inocycle Technology
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.33 times more return on investment than Inocycle Technology. However, Garuda Metalindo Tbk is 3.02 times less risky than Inocycle Technology. It trades about 0.19 of its potential returns per unit of risk. Inocycle Technology Tbk is currently generating about 0.04 per unit of risk. If you would invest 76,425 in Garuda Metalindo Tbk on August 29, 2024 and sell it today you would earn a total of 39,075 from holding Garuda Metalindo Tbk or generate 51.13% 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. Inocycle Technology Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Inocycle Technology Tbk |
Garuda Metalindo and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Inocycle Technology
The main advantage of trading using opposite Garuda Metalindo and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology's long position.| Garuda Metalindo vs. Pelayaran Nelly Dwi | Garuda Metalindo vs. Buana Listya Tama | Garuda Metalindo vs. Mitrabahtera Segara Sejati | Garuda Metalindo vs. Trans Power Marine |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |