Correlation Between Garudafood Putra and Surya Esa

Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Surya Esa 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 Garudafood Putra and Surya Esa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garudafood Putra Putri and Surya Esa Perkasa, you can compare the effects of market volatilities on Garudafood Putra and Surya Esa 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 Garudafood Putra with a short position of Surya Esa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Surya Esa.

Diversification Opportunities for Garudafood Putra and Surya Esa

0.68

Correlation Coefficient

Garudafood Putra  Surya Esa

Poor diversification

The 3 months correlation between Garudafood and Surya is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Surya Esa Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Esa Perkasa and Garudafood Putra 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 Garudafood Putra Putri are associated (or correlated) with Surya Esa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Esa Perkasa has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Surya Esa go up and down completely randomly.

Pair Corralation between Garudafood Putra and Surya Esa

Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.77 times more return on investment than Surya Esa. However, Garudafood Putra Putri is 1.3 times less risky than Surya Esa. It trades about 0.06 of its potential returns per unit of risk. Surya Esa Perkasa is currently generating about 0.01 per unit of risk. If you would invest  37,400  in Garudafood Putra Putri on September 12, 2024 and sell it today you would earn a total of  2,400  from holding Garudafood Putra Putri or generate 6.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Garudafood Putra Putri  vs.  Surya Esa Perkasa

Garudafood Putra Putri

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Garudafood Putra Putri are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Garudafood Putra may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Surya Esa Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surya Esa Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Surya Esa 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 Garudafood Putra and Surya Esa

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

The idea behind Garudafood Putra Putri and Surya Esa Perkasa 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.