Correlation Between Garudafood Putra and Eastparc Hotel
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Eastparc Hotel 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 Eastparc Hotel 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 Eastparc Hotel Tbk, you can compare the effects of market volatilities on Garudafood Putra and Eastparc Hotel 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 Eastparc Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Eastparc Hotel.
Diversification Opportunities for Garudafood Putra and Eastparc Hotel
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garudafood and Eastparc is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Eastparc Hotel Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastparc Hotel Tbk 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 Eastparc Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastparc Hotel Tbk has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Eastparc Hotel go up and down completely randomly.
Pair Corralation between Garudafood Putra and Eastparc Hotel
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 1.02 times more return on investment than Eastparc Hotel. However, Garudafood Putra is 1.02 times more volatile than Eastparc Hotel Tbk. It trades about -0.08 of its potential returns per unit of risk. Eastparc Hotel Tbk is currently generating about -0.11 per unit of risk. If you would invest 42,000 in Garudafood Putra Putri on August 30, 2024 and sell it today you would lose (2,400) from holding Garudafood Putra Putri or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Eastparc Hotel Tbk
Performance |
| Timeline |
| Garudafood Putra Putri |
| Eastparc Hotel Tbk |
Garudafood Putra and Eastparc Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Eastparc Hotel
The main advantage of trading using opposite Garudafood Putra and Eastparc Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Eastparc Hotel 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 Eastparc Hotel will offset losses from the drop in Eastparc Hotel's long position.| Garudafood Putra vs. Sariguna Primatirta PT | Garudafood Putra vs. Ultra Jaya Milk | Garudafood Putra vs. Nippon Indosari Corpindo | Garudafood Putra vs. Kino Indonesia Tbk |
| Eastparc Hotel vs. Menteng Heritage Realty | Eastparc Hotel vs. Hotel Fitra International | Eastparc Hotel vs. Jasa Armada Indonesia | Eastparc Hotel vs. Cahayaputra Asa Keramik |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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