Correlation Between Garda Tujuh and FKS Food
Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and FKS Food 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 Garda Tujuh and FKS Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Tujuh Buana and FKS Food Sejahtera, you can compare the effects of market volatilities on Garda Tujuh and FKS Food 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 Garda Tujuh with a short position of FKS Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and FKS Food.
Diversification Opportunities for Garda Tujuh and FKS Food
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Garda and FKS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and FKS Food Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FKS Food Sejahtera and Garda Tujuh 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 Garda Tujuh Buana are associated (or correlated) with FKS Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FKS Food Sejahtera has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and FKS Food go up and down completely randomly.
Pair Corralation between Garda Tujuh and FKS Food
Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the FKS Food. In addition to that, Garda Tujuh is 1.47 times more volatile than FKS Food Sejahtera. It trades about -0.22 of its total potential returns per unit of risk. FKS Food Sejahtera is currently generating about -0.15 per unit of volatility. If you would invest 13,100 in FKS Food Sejahtera on November 28, 2024 and sell it today you would lose (3,100) from holding FKS Food Sejahtera or give up 23.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
Garda Tujuh Buana vs. FKS Food Sejahtera
Performance |
| Timeline |
| Garda Tujuh Buana |
| FKS Food Sejahtera |
Garda Tujuh and FKS Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Tujuh and FKS Food
The main advantage of trading using opposite Garda Tujuh and FKS Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Tujuh position performs unexpectedly, FKS Food 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 FKS Food will offset losses from the drop in FKS Food's long position.| Garda Tujuh vs. Resource Alam Indonesia | Garda Tujuh vs. Perdana Karya Perkasa | Garda Tujuh vs. Exploitasi Energi Indonesia | Garda Tujuh vs. Bayan Resources Tbk |
| FKS Food vs. Alam Sutera Realty | FKS Food vs. Sentul City Tbk | FKS Food vs. Gajah Tunggal Tbk | FKS Food 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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