Correlation Between Garudafood Putra and Mahkota Group
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Mahkota Group 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 Mahkota Group 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 Mahkota Group Tbk, you can compare the effects of market volatilities on Garudafood Putra and Mahkota Group 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 Mahkota Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Mahkota Group.
Diversification Opportunities for Garudafood Putra and Mahkota Group
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Garudafood and Mahkota is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Mahkota Group Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahkota Group 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 Mahkota Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahkota Group Tbk has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Mahkota Group go up and down completely randomly.
Pair Corralation between Garudafood Putra and Mahkota Group
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 1.5 times more return on investment than Mahkota Group. However, Garudafood Putra is 1.5 times more volatile than Mahkota Group Tbk. It trades about -0.02 of its potential returns per unit of risk. Mahkota Group Tbk is currently generating about -0.03 per unit of risk. If you would invest 41,400 in Garudafood Putra Putri on October 25, 2024 and sell it today you would lose (1,400) from holding Garudafood Putra Putri or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Mahkota Group Tbk
Performance |
| Timeline |
| Garudafood Putra Putri |
| Mahkota Group Tbk |
Garudafood Putra and Mahkota Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Mahkota Group
The main advantage of trading using opposite Garudafood Putra and Mahkota Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Mahkota Group 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 Mahkota Group will offset losses from the drop in Mahkota Group'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 |
| Mahkota Group vs. Austindo Nusantara Jaya | Mahkota Group vs. Garudafood Putra Putri | Mahkota Group vs. Provident Agro Tbk | Mahkota Group vs. Dharma Satya Nusantara |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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