Correlation Between Garudafood Putra and Falmaco Nonwoven
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Falmaco Nonwoven 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 Falmaco Nonwoven 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 Falmaco Nonwoven Industri, you can compare the effects of market volatilities on Garudafood Putra and Falmaco Nonwoven 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 Falmaco Nonwoven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Falmaco Nonwoven.
Diversification Opportunities for Garudafood Putra and Falmaco Nonwoven
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Garudafood and Falmaco is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Falmaco Nonwoven Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falmaco Nonwoven Industri 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 Falmaco Nonwoven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falmaco Nonwoven Industri has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Falmaco Nonwoven go up and down completely randomly.
Pair Corralation between Garudafood Putra and Falmaco Nonwoven
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.36 times more return on investment than Falmaco Nonwoven. However, Garudafood Putra Putri is 2.78 times less risky than Falmaco Nonwoven. It trades about 0.06 of its potential returns per unit of risk. Falmaco Nonwoven Industri is currently generating about 0.01 per unit of risk. If you would invest 37,600 in Garudafood Putra Putri on September 15, 2024 and sell it today you would earn a total of 2,600 from holding Garudafood Putra Putri or generate 6.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Garudafood Putra Putri vs. Falmaco Nonwoven Industri
Performance |
Timeline |
Garudafood Putra Putri |
Falmaco Nonwoven Industri |
Garudafood Putra and Falmaco Nonwoven Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Garudafood Putra and Falmaco Nonwoven
The main advantage of trading using opposite Garudafood Putra and Falmaco Nonwoven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Falmaco Nonwoven 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 Falmaco Nonwoven will offset losses from the drop in Falmaco Nonwoven's long position.Garudafood Putra vs. Austindo Nusantara Jaya | Garudafood Putra vs. Provident Agro Tbk | Garudafood Putra vs. Dharma Satya Nusantara | Garudafood Putra vs. Sawit Sumbermas Sarana |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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