Correlation Between Garuda Metalindo and First Media
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and First Media 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 First Media 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 First Media Tbk, you can compare the effects of market volatilities on Garuda Metalindo and First Media 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 First Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and First Media.
Diversification Opportunities for Garuda Metalindo and First Media
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garuda and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and First Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Media 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 First Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Media Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and First Media go up and down completely randomly.
Pair Corralation between Garuda Metalindo and First Media
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.65 times more return on investment than First Media. However, Garuda Metalindo Tbk is 1.53 times less risky than First Media. It trades about 0.02 of its potential returns per unit of risk. First Media Tbk is currently generating about -0.23 per unit of risk. If you would invest 128,000 in Garuda Metalindo Tbk on October 23, 2024 and sell it today you would earn a total of 500.00 from holding Garuda Metalindo Tbk or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. First Media Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| First Media Tbk |
Garuda Metalindo and First Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and First Media
The main advantage of trading using opposite Garuda Metalindo and First Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, First Media 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 First Media will offset losses from the drop in First Media'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 |
| First Media vs. Garuda Metalindo Tbk | First Media vs. Alumindo Light Metal | First Media vs. Smartfren Telecom Tbk | First Media 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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