Correlation Between Garuda Metalindo and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo, you can compare the effects of market volatilities on Garuda Metalindo and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Hoffmen Cleanindo.
Diversification Opportunities for Garuda Metalindo and Hoffmen Cleanindo
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garuda and Hoffmen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Hoffmen Cleanindo
Assuming the 90 days trading horizon Garuda Metalindo is expected to generate 2.36 times less return on investment than Hoffmen Cleanindo. In addition to that, Garuda Metalindo is 1.1 times more volatile than Hoffmen Cleanindo. It trades about 0.09 of its total potential returns per unit of risk. Hoffmen Cleanindo is currently generating about 0.23 per unit of volatility. If you would invest 18,900 in Hoffmen Cleanindo on November 27, 2024 and sell it today you would earn a total of 1,300 from holding Hoffmen Cleanindo or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Hoffmen Cleanindo
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Hoffmen Cleanindo |
Garuda Metalindo and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Hoffmen Cleanindo
The main advantage of trading using opposite Garuda Metalindo and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo'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 |
| Hoffmen Cleanindo vs. Global Mediacom Tbk | Hoffmen Cleanindo vs. Weha Transportasi Indonesia | Hoffmen Cleanindo vs. Mahaka Media Tbk | Hoffmen Cleanindo vs. Inocycle Technology Tbk |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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