Correlation Between Unilever Indonesia and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia 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 Unilever Indonesia and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Garudafood Putra Putri, you can compare the effects of market volatilities on Unilever Indonesia 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 Unilever Indonesia with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Garudafood Putra.
Diversification Opportunities for Unilever Indonesia and Garudafood Putra
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unilever and Garudafood is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk 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 Unilever Indonesia 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 Unilever Indonesia Tbk 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 Unilever Indonesia i.e., Unilever Indonesia and Garudafood Putra go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Garudafood Putra
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to generate 1.1 times more return on investment than Garudafood Putra. However, Unilever Indonesia is 1.1 times more volatile than Garudafood Putra Putri. It trades about 0.01 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.16 per unit of risk. If you would invest 187,000 in Unilever Indonesia Tbk on September 4, 2024 and sell it today you would lose (500.00) from holding Unilever Indonesia Tbk or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Garudafood Putra Putri
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Garudafood Putra Putri |
Unilever Indonesia and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Garudafood Putra
The main advantage of trading using opposite Unilever Indonesia and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia 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.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Garudafood Putra vs. Astra International Tbk | Garudafood Putra vs. Unilever Indonesia Tbk | Garudafood Putra vs. Telkom Indonesia Tbk | Garudafood Putra vs. Bank Mandiri Persero |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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