Correlation Between Garudafood Putra and Krakatau Steel
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Krakatau Steel 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 Krakatau Steel 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 Krakatau Steel Persero, you can compare the effects of market volatilities on Garudafood Putra and Krakatau Steel 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 Krakatau Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Krakatau Steel.
Diversification Opportunities for Garudafood Putra and Krakatau Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garudafood and Krakatau is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Krakatau Steel Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krakatau Steel Persero 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 Krakatau Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krakatau Steel Persero has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Krakatau Steel go up and down completely randomly.
Pair Corralation between Garudafood Putra and Krakatau Steel
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.95 times more return on investment than Krakatau Steel. However, Garudafood Putra Putri is 1.05 times less risky than Krakatau Steel. It trades about -0.17 of its potential returns per unit of risk. Krakatau Steel Persero is currently generating about -0.23 per unit of risk. If you would invest 43,800 in Garudafood Putra Putri on September 3, 2024 and sell it today you would lose (3,800) from holding Garudafood Putra Putri or give up 8.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Krakatau Steel Persero
Performance |
| Timeline |
| Garudafood Putra Putri |
| Krakatau Steel Persero |
Garudafood Putra and Krakatau Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Krakatau Steel
The main advantage of trading using opposite Garudafood Putra and Krakatau Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Krakatau Steel 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 Krakatau Steel will offset losses from the drop in Krakatau Steel'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 |
| Krakatau Steel vs. Timah Persero Tbk | Krakatau Steel vs. Semen Indonesia Persero | Krakatau Steel vs. Mitra Pinasthika Mustika | Krakatau Steel 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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