Correlation Between Garudafood Putra and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Communication Cable 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 Communication Cable 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 Communication Cable Systems, you can compare the effects of market volatilities on Garudafood Putra and Communication Cable 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 Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Communication Cable.
Diversification Opportunities for Garudafood Putra and Communication Cable
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Garudafood and Communication is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable 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 Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Communication Cable go up and down completely randomly.
Pair Corralation between Garudafood Putra and Communication Cable
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.49 times more return on investment than Communication Cable. However, Garudafood Putra Putri is 2.02 times less risky than Communication Cable. It trades about 0.0 of its potential returns per unit of risk. Communication Cable Systems is currently generating about -0.1 per unit of risk. If you would invest 40,000 in Garudafood Putra Putri on August 29, 2024 and sell it today you would lose (600.00) from holding Garudafood Putra Putri or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Communication Cable Systems
Performance |
| Timeline |
| Garudafood Putra Putri |
| Communication Cable |
Garudafood Putra and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Communication Cable
The main advantage of trading using opposite Garudafood Putra and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable's long position.The idea behind Garudafood Putra Putri and Communication Cable Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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