Correlation Between Garuda Metalindo and Surya Citra
Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Surya Citra 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 Surya Citra 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 Surya Citra Media, you can compare the effects of market volatilities on Garuda Metalindo and Surya Citra 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 Surya Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Surya Citra.
Diversification Opportunities for Garuda Metalindo and Surya Citra
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Garuda and Surya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Surya Citra Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Citra Media 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 Surya Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Citra Media has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Surya Citra go up and down completely randomly.
Pair Corralation between Garuda Metalindo and Surya Citra
Assuming the 90 days trading horizon Garuda Metalindo is expected to generate 9.08 times less return on investment than Surya Citra. But when comparing it to its historical volatility, Garuda Metalindo Tbk is 1.25 times less risky than Surya Citra. It trades about 0.09 of its potential returns per unit of risk. Surya Citra Media is currently generating about 0.66 of returns per unit of risk over similar time horizon. If you would invest 17,900 in Surya Citra Media on November 27, 2024 and sell it today you would earn a total of 5,300 from holding Surya Citra Media or generate 29.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Metalindo Tbk vs. Surya Citra Media
Performance |
| Timeline |
| Garuda Metalindo Tbk |
| Surya Citra Media |
Garuda Metalindo and Surya Citra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Metalindo and Surya Citra
The main advantage of trading using opposite Garuda Metalindo and Surya Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Surya Citra 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 Surya Citra will offset losses from the drop in Surya Citra'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 |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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