Correlation Between Garudafood Putra and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Sawit Sumbermas 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 Sawit Sumbermas 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 Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Garudafood Putra and Sawit Sumbermas 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 Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Sawit Sumbermas.
Diversification Opportunities for Garudafood Putra and Sawit Sumbermas
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garudafood and Sawit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana 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 Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Garudafood Putra and Sawit Sumbermas
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.13 times more return on investment than Sawit Sumbermas. However, Garudafood Putra Putri is 7.48 times less risky than Sawit Sumbermas. It trades about 0.11 of its potential returns per unit of risk. Sawit Sumbermas Sarana is currently generating about -0.02 per unit of risk. If you would invest 39,400 in Garudafood Putra Putri on September 13, 2024 and sell it today you would earn a total of 800.00 from holding Garudafood Putra Putri or generate 2.03% 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. Sawit Sumbermas Sarana
Performance |
| Timeline |
| Garudafood Putra Putri |
| Sawit Sumbermas Sarana |
Garudafood Putra and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Sawit Sumbermas
The main advantage of trading using opposite Garudafood Putra and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' 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 |
| Sawit Sumbermas vs. Surya Citra Media | Sawit Sumbermas vs. Matahari Department Store | Sawit Sumbermas vs. Salim Ivomas Pratama | Sawit Sumbermas vs. Akr Corporindo 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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