Correlation Between Indointernet Tbk and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Indointernet Tbk and Garuda Metalindo 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 Indointernet Tbk and Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indointernet Tbk PT and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Indointernet Tbk and Garuda Metalindo 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 Indointernet Tbk with a short position of Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indointernet Tbk and Garuda Metalindo.
Diversification Opportunities for Indointernet Tbk and Garuda Metalindo
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indointernet and Garuda is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Indointernet Tbk PT and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk and Indointernet Tbk 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 Indointernet Tbk PT are associated (or correlated) with Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Indointernet Tbk i.e., Indointernet Tbk and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Indointernet Tbk and Garuda Metalindo
Assuming the 90 days trading horizon Indointernet Tbk PT is expected to generate 21.81 times more return on investment than Garuda Metalindo. However, Indointernet Tbk is 21.81 times more volatile than Garuda Metalindo Tbk. It trades about 0.04 of its potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.07 per unit of risk. If you would invest 404,000 in Indointernet Tbk PT on September 2, 2024 and sell it today you would lose (7,000) from holding Indointernet Tbk PT or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indointernet Tbk PT vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Indointernet Tbk |
| Garuda Metalindo Tbk |
Indointernet Tbk and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indointernet Tbk and Garuda Metalindo
The main advantage of trading using opposite Indointernet Tbk and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indointernet Tbk position performs unexpectedly, Garuda Metalindo 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 Garuda Metalindo will offset losses from the drop in Garuda Metalindo's long position.| Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. NFC Indonesia PT | Indointernet Tbk vs. Kioson Komersial Indonesia |
| Garuda Metalindo vs. Matahari Department Store | Garuda Metalindo vs. Multi Medika Internasional | Garuda Metalindo vs. Visi Media Asia | Garuda Metalindo vs. Bayan Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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