Correlation Between Garuda Indonesia and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Garuda Indonesia and Inocycle Technology 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 Garuda Indonesia and Inocycle Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garuda Indonesia Persero and Inocycle Technology Tbk, you can compare the effects of market volatilities on Garuda Indonesia and Inocycle Technology 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 Garuda Indonesia with a short position of Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Indonesia and Inocycle Technology.
Diversification Opportunities for Garuda Indonesia and Inocycle Technology
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Garuda and Inocycle is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Indonesia Persero and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology Tbk and Garuda Indonesia 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 Garuda Indonesia Persero are associated (or correlated) with Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Garuda Indonesia i.e., Garuda Indonesia and Inocycle Technology go up and down completely randomly.
Pair Corralation between Garuda Indonesia and Inocycle Technology
Assuming the 90 days trading horizon Garuda Indonesia Persero is expected to under-perform the Inocycle Technology. But the stock apears to be less risky and, when comparing its historical volatility, Garuda Indonesia Persero is 1.17 times less risky than Inocycle Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Inocycle Technology Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,900 in Inocycle Technology Tbk on August 30, 2024 and sell it today you would lose (2,800) from holding Inocycle Technology Tbk or give up 21.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garuda Indonesia Persero vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Garuda Indonesia Persero |
| Inocycle Technology Tbk |
Garuda Indonesia and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garuda Indonesia and Inocycle Technology
The main advantage of trading using opposite Garuda Indonesia and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Indonesia position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology's long position.| Garuda Indonesia vs. Krakatau Steel Persero | Garuda Indonesia vs. Jasa Marga Tbk | Garuda Indonesia vs. Wijaya Karya Beton | Garuda Indonesia vs. Adhi Karya Persero |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |