Correlation Between Garudafood Putra and Bhuwanatala Indah
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Bhuwanatala Indah 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 Garudafood Putra and Bhuwanatala Indah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garudafood Putra Putri and Bhuwanatala Indah Permai, you can compare the effects of market volatilities on Garudafood Putra and Bhuwanatala Indah 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 Garudafood Putra with a short position of Bhuwanatala Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Bhuwanatala Indah.
Diversification Opportunities for Garudafood Putra and Bhuwanatala Indah
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garudafood and Bhuwanatala is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Bhuwanatala Indah Permai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhuwanatala Indah Permai and Garudafood Putra 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 Garudafood Putra Putri are associated (or correlated) with Bhuwanatala Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhuwanatala Indah Permai has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Bhuwanatala Indah go up and down completely randomly.
Pair Corralation between Garudafood Putra and Bhuwanatala Indah
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to under-perform the Bhuwanatala Indah. But the stock apears to be less risky and, when comparing its historical volatility, Garudafood Putra Putri is 1.03 times less risky than Bhuwanatala Indah. The stock trades about -0.18 of its potential returns per unit of risk. The Bhuwanatala Indah Permai is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,000 in Bhuwanatala Indah Permai on September 2, 2024 and sell it today you would earn a total of 200.00 from holding Bhuwanatala Indah Permai or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Bhuwanatala Indah Permai
Performance |
| Timeline |
| Garudafood Putra Putri |
| Bhuwanatala Indah Permai |
Garudafood Putra and Bhuwanatala Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Bhuwanatala Indah
The main advantage of trading using opposite Garudafood Putra and Bhuwanatala Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Bhuwanatala Indah 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 Bhuwanatala Indah will offset losses from the drop in Bhuwanatala Indah's long position.| Garudafood Putra vs. Bank BRISyariah Tbk | Garudafood Putra vs. Mitra Pinasthika Mustika | Garudafood Putra vs. Jakarta Int Hotels | Garudafood Putra vs. Indosterling Technomedia Tbk |
| Bhuwanatala Indah vs. Lippo Cikarang Tbk | Bhuwanatala Indah vs. Lippo Karawaci Tbk | Bhuwanatala Indah vs. Mitra Pinasthika Mustika | Bhuwanatala Indah vs. Jakarta Int Hotels |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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