Correlation Between Garudafood Putra and Indo Oil
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Indo Oil 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 Indo Oil 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 Indo Oil Perkasa, you can compare the effects of market volatilities on Garudafood Putra and Indo Oil 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 Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Indo Oil.
Diversification Opportunities for Garudafood Putra and Indo Oil
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Garudafood and Indo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa 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 Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Indo Oil go up and down completely randomly.
Pair Corralation between Garudafood Putra and Indo Oil
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.42 times more return on investment than Indo Oil. However, Garudafood Putra Putri is 2.4 times less risky than Indo Oil. It trades about -0.03 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.03 per unit of risk. If you would invest 50,231 in Garudafood Putra Putri on August 30, 2024 and sell it today you would lose (10,831) from holding Garudafood Putra Putri or give up 21.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Indo Oil Perkasa
Performance |
| Timeline |
| Garudafood Putra Putri |
| Indo Oil Perkasa |
Garudafood Putra and Indo Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Indo Oil
The main advantage of trading using opposite Garudafood Putra and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil'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 |
| Indo Oil vs. Sentra Food Indonesia | Indo Oil vs. Buyung Poetra Sembada | Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Campina Ice Cream |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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