Correlation Between Garudafood Putra and Modern Internasional
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Modern Internasional 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 Modern Internasional 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 Modern Internasional Tbk, you can compare the effects of market volatilities on Garudafood Putra and Modern Internasional 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 Modern Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Modern Internasional.
Diversification Opportunities for Garudafood Putra and Modern Internasional
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garudafood and Modern is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Modern Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modern Internasional 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 Modern Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modern Internasional Tbk has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Modern Internasional go up and down completely randomly.
Pair Corralation between Garudafood Putra and Modern Internasional
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to under-perform the Modern Internasional. But the stock apears to be less risky and, when comparing its historical volatility, Garudafood Putra Putri is 6.5 times less risky than Modern Internasional. The stock trades about 0.0 of its potential returns per unit of risk. The Modern Internasional Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Modern Internasional Tbk on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Modern Internasional Tbk or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Modern Internasional Tbk
Performance |
| Timeline |
| Garudafood Putra Putri |
| Modern Internasional Tbk |
Garudafood Putra and Modern Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Modern Internasional
The main advantage of trading using opposite Garudafood Putra and Modern Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Modern Internasional 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 Modern Internasional will offset losses from the drop in Modern Internasional'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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