Correlation Between GUDANG GARAM and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both GUDANG GARAM and Meta Platforms 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 GUDANG GARAM and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUDANG GARAM and Meta Platforms, you can compare the effects of market volatilities on GUDANG GARAM and Meta Platforms 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 GUDANG GARAM with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUDANG GARAM and Meta Platforms.
Diversification Opportunities for GUDANG GARAM and Meta Platforms
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GUDANG and Meta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and GUDANG GARAM 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 GUDANG GARAM are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and Meta Platforms go up and down completely randomly.
Pair Corralation between GUDANG GARAM and Meta Platforms
Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the Meta Platforms. But the stock apears to be less risky and, when comparing its historical volatility, GUDANG GARAM is 1.04 times less risky than Meta Platforms. The stock trades about -0.07 of its potential returns per unit of risk. The Meta Platforms is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 16,799 in Meta Platforms on November 1, 2024 and sell it today you would earn a total of 49,551 from holding Meta Platforms or generate 294.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUDANG GARAM vs. Meta Platforms
Performance |
| Timeline |
| GUDANG GARAM |
| Meta Platforms |
GUDANG GARAM and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUDANG GARAM and Meta Platforms
The main advantage of trading using opposite GUDANG GARAM and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUDANG GARAM position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| GUDANG GARAM vs. DICKER DATA LTD | GUDANG GARAM vs. Teradata Corp | GUDANG GARAM vs. Corsair Gaming | GUDANG GARAM vs. CN DATANG C |
| Meta Platforms vs. MARKET VECTR RETAIL | Meta Platforms vs. Carsales | Meta Platforms vs. Indutrade AB | Meta Platforms vs. TRADELINK ELECTRON |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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