Correlation Between Fast Food and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Fast Food 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 Fast Food and Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Fast Food 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 Fast Food with a short position of Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Garuda Metalindo.
Diversification Opportunities for Fast Food and Garuda Metalindo
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Garuda is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia 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 Fast 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 Fast Food Indonesia 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 Fast Food i.e., Fast Food and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Fast Food and Garuda Metalindo
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the Garuda Metalindo. In addition to that, Fast Food is 1.18 times more volatile than Garuda Metalindo Tbk. It trades about -0.41 of its total potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.09 per unit of volatility. If you would invest 114,000 in Garuda Metalindo Tbk on August 30, 2024 and sell it today you would earn a total of 5,000 from holding Garuda Metalindo Tbk or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Food Indonesia vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Fast Food Indonesia |
| Garuda Metalindo Tbk |
Fast Food and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Garuda Metalindo
The main advantage of trading using opposite Fast Food and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food 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.| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
| Garuda Metalindo vs. Indo Kordsa Tbk | Garuda Metalindo vs. Indospring Tbk | Garuda Metalindo vs. Kabelindo Murni Tbk | Garuda Metalindo vs. Blue Bird 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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