Correlation Between Buyung Poetra and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Buyung Poetra and Garudafood Putra 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 Buyung Poetra and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buyung Poetra Sembada and Garudafood Putra Putri, you can compare the effects of market volatilities on Buyung Poetra and Garudafood Putra 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 Buyung Poetra with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buyung Poetra and Garudafood Putra.
Diversification Opportunities for Buyung Poetra and Garudafood Putra
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Buyung and Garudafood is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Buyung Poetra Sembada and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri and Buyung Poetra 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 Buyung Poetra Sembada are associated (or correlated) with Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of Buyung Poetra i.e., Buyung Poetra and Garudafood Putra go up and down completely randomly.
Pair Corralation between Buyung Poetra and Garudafood Putra
Assuming the 90 days trading horizon Buyung Poetra Sembada is expected to generate 2.69 times more return on investment than Garudafood Putra. However, Buyung Poetra is 2.69 times more volatile than Garudafood Putra Putri. It trades about 0.03 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.03 per unit of risk. If you would invest 10,492 in Buyung Poetra Sembada on August 29, 2024 and sell it today you would earn a total of 1,908 from holding Buyung Poetra Sembada or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buyung Poetra Sembada vs. Garudafood Putra Putri
Performance |
| Timeline |
| Buyung Poetra Sembada |
| Garudafood Putra Putri |
Buyung Poetra and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buyung Poetra and Garudafood Putra
The main advantage of trading using opposite Buyung Poetra and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buyung Poetra position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.The idea behind Buyung Poetra Sembada and Garudafood Putra Putri pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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