Correlation Between Garuda Metalindo and Panin Financial
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Panin Financial 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 Panin Financial 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 Panin Financial Tbk, you can compare the effects of market volatilities on Garuda Metalindo and Panin Financial 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 Panin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Panin Financial.
Diversification Opportunities for Garuda Metalindo and Panin Financial
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Garuda and Panin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Panin Financial Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panin Financial 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 Panin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panin Financial Tbk has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Panin Financial go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Panin Financial
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.94 times more return on investment than Panin Financial. However, Garuda Metalindo Tbk is 1.07 times less risky than Panin Financial. It trades about 0.09 of its potential returns per unit of risk. Panin Financial Tbk is currently generating about -0.48 per unit of risk. If you would invest 130,500 in Garuda Metalindo Tbk on November 27, 2024 and sell it today you would earn a total of 3,500 from holding Garuda Metalindo Tbk or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Panin Financial Tbk
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Panin Financial Tbk |
Garuda Metalindo and Panin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Panin Financial
The main advantage of trading using opposite Garuda Metalindo and Panin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Panin Financial 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 Panin Financial will offset losses from the drop in Panin Financial'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 |
| Panin Financial vs. Bank Pan Indonesia | Panin Financial vs. Paninvest Tbk | Panin Financial vs. Kawasan Industri Jababeka | Panin Financial vs. Global Mediacom 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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