Correlation Between Garuda Metalindo and Prima Alloy
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Prima Alloy 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 Prima Alloy 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 Prima Alloy Steel, you can compare the effects of market volatilities on Garuda Metalindo and Prima Alloy 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 Prima Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Prima Alloy.
Diversification Opportunities for Garuda Metalindo and Prima Alloy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Garuda and Prima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Prima Alloy Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Alloy Steel 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 Prima Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Alloy Steel has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Prima Alloy go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Prima Alloy
Assuming the 90 days trading horizon Garuda Metalindo Tbk is expected to generate 0.72 times more return on investment than Prima Alloy. However, Garuda Metalindo Tbk is 1.4 times less risky than Prima Alloy. It trades about 0.06 of its potential returns per unit of risk. Prima Alloy Steel is currently generating about -0.02 per unit of risk. If you would invest 68,843 in Garuda Metalindo Tbk on August 30, 2024 and sell it today you would earn a total of 46,657 from holding Garuda Metalindo Tbk or generate 67.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Prima Alloy Steel
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Prima Alloy Steel |
Garuda Metalindo and Prima Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Prima Alloy
The main advantage of trading using opposite Garuda Metalindo and Prima Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Prima Alloy 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 Prima Alloy will offset losses from the drop in Prima Alloy'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 |
| Prima Alloy vs. Pan Brothers Tbk | Prima Alloy vs. Ricky Putra Globalindo | Prima Alloy vs. Asia Pacific Fibers | Prima Alloy vs. Multi Prima Sejahtera |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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