Correlation Between Campina Ice and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Campina Ice and Garudafood Putra 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 Campina Ice and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campina Ice Cream and Garudafood Putra Putri, you can compare the effects of market volatilities on Campina Ice and Garudafood Putra 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 Campina Ice with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campina Ice and Garudafood Putra.
Diversification Opportunities for Campina Ice and Garudafood Putra
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Campina and Garudafood is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Campina Ice Cream and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri and Campina Ice 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 Campina Ice Cream are associated (or correlated) with Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of Campina Ice i.e., Campina Ice and Garudafood Putra go up and down completely randomly.
Pair Corralation between Campina Ice and Garudafood Putra
Assuming the 90 days trading horizon Campina Ice Cream is expected to generate 2.65 times more return on investment than Garudafood Putra. However, Campina Ice is 2.65 times more volatile than Garudafood Putra Putri. It trades about 0.02 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.03 per unit of risk. If you would invest 26,142 in Campina Ice Cream on August 29, 2024 and sell it today you would earn a total of 658.00 from holding Campina Ice Cream or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Campina Ice Cream vs. Garudafood Putra Putri
Performance |
| Timeline |
| Campina Ice Cream |
| Garudafood Putra Putri |
Campina Ice and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campina Ice and Garudafood Putra
The main advantage of trading using opposite Campina Ice and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campina Ice position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.The idea behind Campina Ice Cream and Garudafood Putra Putri 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.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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