Correlation Between Millennium Pharmacon and Garuda Indonesia
Can any of the company-specific risk be diversified away by investing in both Millennium Pharmacon and Garuda Indonesia 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 Millennium Pharmacon and Garuda Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Millennium Pharmacon International and Garuda Indonesia Persero, you can compare the effects of market volatilities on Millennium Pharmacon and Garuda Indonesia 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 Millennium Pharmacon with a short position of Garuda Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millennium Pharmacon and Garuda Indonesia.
Diversification Opportunities for Millennium Pharmacon and Garuda Indonesia
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Millennium and Garuda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Pharmacon Internati and Garuda Indonesia Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Indonesia Persero and Millennium Pharmacon 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 Millennium Pharmacon International are associated (or correlated) with Garuda Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Indonesia Persero has no effect on the direction of Millennium Pharmacon i.e., Millennium Pharmacon and Garuda Indonesia go up and down completely randomly.
Pair Corralation between Millennium Pharmacon and Garuda Indonesia
Assuming the 90 days trading horizon Millennium Pharmacon International is expected to generate 1.2 times more return on investment than Garuda Indonesia. However, Millennium Pharmacon is 1.2 times more volatile than Garuda Indonesia Persero. It trades about -0.01 of its potential returns per unit of risk. Garuda Indonesia Persero is currently generating about -0.02 per unit of risk. If you would invest 28,032 in Millennium Pharmacon International on August 27, 2024 and sell it today you would lose (10,732) from holding Millennium Pharmacon International or give up 38.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.77% |
| Values | Daily Returns |
Millennium Pharmacon Internati vs. Garuda Indonesia Persero
Performance |
| Timeline |
| Millennium Pharmacon |
| Garuda Indonesia Persero |
Millennium Pharmacon and Garuda Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Millennium Pharmacon and Garuda Indonesia
The main advantage of trading using opposite Millennium Pharmacon and Garuda Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Millennium Pharmacon position performs unexpectedly, Garuda Indonesia 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 Garuda Indonesia will offset losses from the drop in Garuda Indonesia's long position.| Millennium Pharmacon vs. Astra Graphia Tbk | Millennium Pharmacon vs. Hexindo Adiperkasa Tbk | Millennium Pharmacon vs. Lautan Luas Tbk | Millennium Pharmacon vs. Citra Marga Nusaphala |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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