Correlation Between Garudafood Putra and Equity Development
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Equity Development 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 Equity Development 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 Equity Development Investment, you can compare the effects of market volatilities on Garudafood Putra and Equity Development 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 Equity Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Equity Development.
Diversification Opportunities for Garudafood Putra and Equity Development
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garudafood and Equity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Equity Development Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Development 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 Equity Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Development has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Equity Development go up and down completely randomly.
Pair Corralation between Garudafood Putra and Equity Development
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to under-perform the Equity Development. But the stock apears to be less risky and, when comparing its historical volatility, Garudafood Putra Putri is 1.06 times less risky than Equity Development. The stock trades about -0.17 of its potential returns per unit of risk. The Equity Development Investment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Equity Development Investment on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Equity Development Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Equity Development Investment
Performance |
| Timeline |
| Garudafood Putra Putri |
| Equity Development |
Garudafood Putra and Equity Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Equity Development
The main advantage of trading using opposite Garudafood Putra and Equity Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Equity Development 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 Equity Development will offset losses from the drop in Equity Development's long position.| Garudafood Putra vs. Astra International Tbk | Garudafood Putra vs. Unilever Indonesia Tbk | Garudafood Putra vs. Telkom Indonesia Tbk | Garudafood Putra vs. Bank Mandiri Persero |
| Equity Development vs. Paninvest Tbk | Equity Development vs. Mitra Pinasthika Mustika | Equity Development vs. Jakarta Int Hotels | Equity Development vs. Asuransi Harta Aman |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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