Correlation Between Fast Food and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Fast 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 Fast 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 Fast Food Indonesia and Garudafood Putra Putri, you can compare the effects of market volatilities on Fast 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 Fast Food with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Garudafood Putra.
Diversification Opportunities for Fast Food and Garudafood Putra
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Garudafood is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fast 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 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 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 Fast Food i.e., Fast Food and Garudafood Putra go up and down completely randomly.
Pair Corralation between Fast Food and Garudafood Putra
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the Garudafood Putra. In addition to that, Fast Food is 1.26 times more volatile than Garudafood Putra Putri. It trades about -0.4 of its total potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.18 per unit of volatility. If you would invest 44,200 in Garudafood Putra Putri on September 2, 2024 and sell it today you would lose (4,200) from holding Garudafood Putra Putri or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Food Indonesia vs. Garudafood Putra Putri
Performance |
| Timeline |
| Fast Food Indonesia |
| Garudafood Putra Putri |
Fast Food and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Garudafood Putra
The main advantage of trading using opposite Fast Food and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast 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.| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
| Garudafood Putra vs. Bank BRISyariah Tbk | Garudafood Putra vs. Mitra Pinasthika Mustika | Garudafood Putra vs. Jakarta Int Hotels | Garudafood Putra vs. Indosterling Technomedia 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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