Correlation Between Garuda Metalindo and Metrodata Electronics
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Metrodata Electronics 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 Metrodata Electronics 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 Metrodata Electronics Tbk, you can compare the effects of market volatilities on Garuda Metalindo and Metrodata Electronics 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 Metrodata Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Metrodata Electronics.
Diversification Opportunities for Garuda Metalindo and Metrodata Electronics
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Garuda and Metrodata is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Metrodata Electronics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrodata Electronics 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 Metrodata Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrodata Electronics Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Metrodata Electronics go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Metrodata Electronics
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 1.16 times more return on investment than Metrodata Electronics. However, Garuda Metalindo is 1.16 times more volatile than Metrodata Electronics Tbk. It trades about 0.07 of its potential returns per unit of risk. Metrodata Electronics Tbk is currently generating about 0.03 per unit of risk. If you would invest 68,843 in Garuda Metalindo Tbk on September 2, 2024 and sell it today you would earn a total of 53,157 from holding Garuda Metalindo Tbk or generate 77.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Metrodata Electronics Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Metrodata Electronics Tbk |
Garuda Metalindo and Metrodata Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Metrodata Electronics
The main advantage of trading using opposite Garuda Metalindo and Metrodata Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Metrodata Electronics 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 Metrodata Electronics will offset losses from the drop in Metrodata Electronics' long position.| Garuda Metalindo vs. Matahari Department Store | Garuda Metalindo vs. Multi Medika Internasional | Garuda Metalindo vs. Visi Media Asia | Garuda Metalindo vs. Bayan Resources Tbk |
| Metrodata Electronics vs. Multipolar Tbk | Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Matahari Putra Prima | Metrodata Electronics vs. Ramayana Lestari Sentosa |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |