Correlation Between Garuda Metalindo and PT UBC

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Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and PT UBC 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 PT UBC 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 PT UBC Medical, you can compare the effects of market volatilities on Garuda Metalindo and PT UBC 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 PT UBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and PT UBC.

Diversification Opportunities for Garuda Metalindo and PT UBC

GarudaLABSDiversified AwayGarudaLABSDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Garuda and LABS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and PT UBC Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT UBC Medical 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 PT UBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT UBC Medical has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and PT UBC go up and down completely randomly.

Pair Corralation between Garuda Metalindo and PT UBC

Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.32 times more return on investment than PT UBC. However, Garuda Metalindo Tbk is 3.12 times less risky than PT UBC. It trades about 0.2 of its potential returns per unit of risk. PT UBC Medical is currently generating about 0.02 per unit of risk. If you would invest  90,000  in Garuda Metalindo Tbk on September 15, 2024 and sell it today you would earn a total of  40,000  from holding Garuda Metalindo Tbk or generate 44.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy88.1%
ValuesDaily Returns

Garuda Metalindo Tbk  vs.  PT UBC Medical

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -10-505101520
JavaScript chart by amCharts 3.21.15BOLT LABS
       Timeline  
Garuda Metalindo Tbk 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Garuda Metalindo Tbk are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Garuda Metalindo disclosed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1,0501,1001,1501,2001,2501,300
PT UBC Medical 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in PT UBC Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, PT UBC is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec125130135140145150155160

Garuda Metalindo and PT UBC Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.29-3.97-2.64-1.310.02221.442.914.385.85 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15BOLT LABS
       Returns  

Pair Trading with Garuda Metalindo and PT UBC

The main advantage of trading using opposite Garuda Metalindo and PT UBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, PT UBC 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 PT UBC will offset losses from the drop in PT UBC's long position.
The idea behind Garuda Metalindo Tbk and PT UBC Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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.

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