Correlation Between Garda Tujuh and Ultra Jaya
Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and Ultra Jaya 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 Ultra Jaya 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 Ultra Jaya Milk, you can compare the effects of market volatilities on Garda Tujuh and Ultra Jaya 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 Ultra Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and Ultra Jaya.
Diversification Opportunities for Garda Tujuh and Ultra Jaya
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garda and Ultra is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Ultra Jaya Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Jaya Milk 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 Ultra Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Jaya Milk has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Ultra Jaya go up and down completely randomly.
Pair Corralation between Garda Tujuh and Ultra Jaya
Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the Ultra Jaya. But the stock apears to be less risky and, when comparing its historical volatility, Garda Tujuh Buana is 1.31 times less risky than Ultra Jaya. The stock trades about -0.34 of its potential returns per unit of risk. The Ultra Jaya Milk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 166,000 in Ultra Jaya Milk on October 23, 2024 and sell it today you would lose (2,500) from holding Ultra Jaya Milk or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Tujuh Buana vs. Ultra Jaya Milk
Performance |
| Timeline |
| Garda Tujuh Buana |
| Ultra Jaya Milk |
Garda Tujuh and Ultra Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Tujuh and Ultra Jaya
The main advantage of trading using opposite Garda Tujuh and Ultra Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Tujuh position performs unexpectedly, Ultra Jaya 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 Ultra Jaya will offset losses from the drop in Ultra Jaya'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 |
| Ultra Jaya vs. Mayora Indah Tbk | Ultra Jaya vs. Sido Muncul PT | Ultra Jaya vs. Indofood Cbp Sukses | Ultra Jaya vs. Ace Hardware Indonesia |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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