Correlation Between Bintang Oto and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Garuda Metalindo 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 Bintang Oto and Garuda Metalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bintang Oto Global and Garuda Metalindo Tbk, you can compare the effects of market volatilities on Bintang Oto and Garuda Metalindo 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 Bintang Oto with a short position of Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Garuda Metalindo.
Diversification Opportunities for Bintang Oto and Garuda Metalindo
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bintang and Garuda is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk and Bintang Oto 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 Bintang Oto Global are associated (or correlated) with Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Bintang Oto i.e., Bintang Oto and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Bintang Oto and Garuda Metalindo
Assuming the 90 days trading horizon Bintang Oto Global is expected to generate 1.24 times more return on investment than Garuda Metalindo. However, Bintang Oto is 1.24 times more volatile than Garuda Metalindo Tbk. It trades about 0.33 of its potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.06 per unit of risk. If you would invest 56,000 in Bintang Oto Global on December 4, 2024 and sell it today you would earn a total of 10,500 from holding Bintang Oto Global or generate 18.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Bintang Oto Global vs. Garuda Metalindo Tbk
Performance |
Timeline |
Bintang Oto Global |
Garuda Metalindo Tbk |
Bintang Oto and Garuda Metalindo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bintang Oto and Garuda Metalindo
The main advantage of trading using opposite Bintang Oto and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Garuda Metalindo 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 Metalindo will offset losses from the drop in Garuda Metalindo's long position.Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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