Correlation Between Garda Tujuh and Bali Towerindo
Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and Bali Towerindo 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 Bali Towerindo 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 Bali Towerindo Sentra, you can compare the effects of market volatilities on Garda Tujuh and Bali Towerindo 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 Bali Towerindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and Bali Towerindo.
Diversification Opportunities for Garda Tujuh and Bali Towerindo
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Garda and Bali is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Bali Towerindo Sentra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bali Towerindo Sentra 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 Bali Towerindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bali Towerindo Sentra has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Bali Towerindo go up and down completely randomly.
Pair Corralation between Garda Tujuh and Bali Towerindo
Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the Bali Towerindo. But the stock apears to be less risky and, when comparing its historical volatility, Garda Tujuh Buana is 1.62 times less risky than Bali Towerindo. The stock trades about -0.72 of its potential returns per unit of risk. The Bali Towerindo Sentra is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 165,000 in Bali Towerindo Sentra on November 5, 2024 and sell it today you would lose (8,500) from holding Bali Towerindo Sentra or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Tujuh Buana vs. Bali Towerindo Sentra
Performance |
| Timeline |
| Garda Tujuh Buana |
| Bali Towerindo Sentra |
Garda Tujuh and Bali Towerindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Tujuh and Bali Towerindo
The main advantage of trading using opposite Garda Tujuh and Bali Towerindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Tujuh position performs unexpectedly, Bali Towerindo 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 Bali Towerindo will offset losses from the drop in Bali Towerindo'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 |
| Bali Towerindo vs. Fast Food Indonesia | Bali Towerindo vs. Centratama Telekomunikasi Ind | Bali Towerindo vs. Sumber Alfaria Trijaya | Bali Towerindo vs. Bayu Buana 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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