Correlation Between Diamond Food and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Diamond Food 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 Diamond Food and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Food Indonesia and Garudafood Putra Putri, you can compare the effects of market volatilities on Diamond Food 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 Diamond Food with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Food and Garudafood Putra.
Diversification Opportunities for Diamond Food and Garudafood Putra
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamond and Garudafood is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Food Indonesia 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 Diamond Food 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 Diamond Food Indonesia 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 Diamond Food i.e., Diamond Food and Garudafood Putra go up and down completely randomly.
Pair Corralation between Diamond Food and Garudafood Putra
Assuming the 90 days trading horizon Diamond Food Indonesia is expected to generate 0.87 times more return on investment than Garudafood Putra. However, Diamond Food Indonesia is 1.15 times less risky than Garudafood Putra. It trades about 0.0 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.04 per unit of risk. If you would invest 81,500 in Diamond Food Indonesia on August 24, 2024 and sell it today you would lose (1,500) from holding Diamond Food Indonesia or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Diamond Food Indonesia vs. Garudafood Putra Putri
Performance |
| Timeline |
| Diamond Food Indonesia |
| Garudafood Putra Putri |
Diamond Food and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Food and Garudafood Putra
The main advantage of trading using opposite Diamond Food and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Food 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.| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Campina Ice Cream | Diamond Food vs. Uni Charm Indonesia | Diamond Food vs. Sariguna Primatirta PT |
| Garudafood Putra vs. Sariguna Primatirta PT | Garudafood Putra vs. Ultra Jaya Milk | Garudafood Putra vs. Nippon Indosari Corpindo | Garudafood Putra vs. Kino Indonesia 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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