Correlation Between Indo Oil and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Indo Oil 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 Indo Oil and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Oil Perkasa and Garudafood Putra Putri, you can compare the effects of market volatilities on Indo Oil 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 Indo Oil with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Oil and Garudafood Putra.
Diversification Opportunities for Indo Oil and Garudafood Putra
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indo and Garudafood is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Indo Oil Perkasa 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 Indo Oil 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 Indo Oil Perkasa 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 Indo Oil i.e., Indo Oil and Garudafood Putra go up and down completely randomly.
Pair Corralation between Indo Oil and Garudafood Putra
Assuming the 90 days trading horizon Indo Oil Perkasa is expected to under-perform the Garudafood Putra. In addition to that, Indo Oil is 2.8 times more volatile than Garudafood Putra Putri. It trades about -0.02 of its total potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.02 per unit of volatility. If you would invest 45,406 in Garudafood Putra Putri on September 2, 2024 and sell it today you would lose (5,406) from holding Garudafood Putra Putri or give up 11.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Oil Perkasa vs. Garudafood Putra Putri
Performance |
| Timeline |
| Indo Oil Perkasa |
| Garudafood Putra Putri |
Indo Oil and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Oil and Garudafood Putra
The main advantage of trading using opposite Indo Oil and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Oil 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.| Indo Oil vs. Inocycle Technology Tbk | Indo Oil vs. Indo Acidatama Tbk | Indo Oil vs. Grand Kartech Tbk | Indo Oil vs. Steel Pipe Industry |
| Garudafood Putra vs. Bank BRISyariah Tbk | Garudafood Putra vs. Mitra Pinasthika Mustika | Garudafood Putra vs. Jakarta Int Hotels | Garudafood Putra vs. Indosterling Technomedia 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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