Correlation Between Garuda Metalindo and Trinitan Metals

Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Trinitan Metals 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 Garuda Metalindo and Trinitan Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garuda Metalindo Tbk and Trinitan Metals and, you can compare the effects of market volatilities on Garuda Metalindo and Trinitan Metals 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 Garuda Metalindo with a short position of Trinitan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Trinitan Metals.

Diversification Opportunities for Garuda Metalindo and Trinitan Metals

0.0

Correlation Coefficient

Garuda Metalindo  Trinitan Metals

Pay attention - limited upside

The 3 months correlation between Garuda and Trinitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Trinitan Metals and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinitan Metals and Garuda Metalindo 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 Garuda Metalindo Tbk are associated (or correlated) with Trinitan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinitan Metals has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Trinitan Metals go up and down completely randomly.

Pair Corralation between Garuda Metalindo and Trinitan Metals

If you would invest  104,000  in Garuda Metalindo Tbk on September 17, 2024 and sell it today you would earn a total of  26,000  from holding Garuda Metalindo Tbk or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Garuda Metalindo Tbk  vs.  Trinitan Metals and

Garuda Metalindo Tbk

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Garuda Metalindo Tbk are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Garuda Metalindo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Trinitan Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trinitan Metals and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Trinitan Metals is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Garuda Metalindo and Trinitan Metals

The main advantage of trading using opposite Garuda Metalindo and Trinitan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Metalindo position performs unexpectedly, Trinitan Metals 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 Trinitan Metals will offset losses from the drop in Trinitan Metals' long position.

The idea behind Garuda Metalindo Tbk and Trinitan Metals and 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.