Correlation Between Garuda Metalindo and Yelooo Integra

Can any of the company-specific risk be diversified away by investing in both Garuda Metalindo and Yelooo Integra 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 Yelooo Integra 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 Yelooo Integra Datanet, you can compare the effects of market volatilities on Garuda Metalindo and Yelooo Integra 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 Yelooo Integra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Metalindo and Yelooo Integra.

Diversification Opportunities for Garuda Metalindo and Yelooo Integra

0.34

Correlation Coefficient

Garuda Metalindo  Yelooo Integra

Weak diversification

The 3 months correlation between Garuda and Yelooo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Metalindo Tbk and Yelooo Integra Datanet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelooo Integra Datanet 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 Yelooo Integra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelooo Integra Datanet has no effect on the direction of Garuda Metalindo i.e., Garuda Metalindo and Yelooo Integra go up and down completely randomly.

Pair Corralation between Garuda Metalindo and Yelooo Integra

Assuming the 90 days trading horizon Garuda Metalindo is expected to generate 35.14 times less return on investment than Yelooo Integra. But when comparing it to its historical volatility, Garuda Metalindo Tbk is 3.73 times less risky than Yelooo Integra. It trades about 0.02 of its potential returns per unit of risk. Yelooo Integra Datanet is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Yelooo Integra Datanet on December 23, 2024 and sell it today you would earn a total of  800.00  from holding Yelooo Integra Datanet or generate 53.33% return on investment over 90 days.

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

Garuda Metalindo Tbk  vs.  Yelooo Integra Datanet

Garuda Metalindo Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Garuda Metalindo Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Garuda Metalindo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Yelooo Integra Datanet

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yelooo Integra Datanet are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Yelooo Integra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garuda Metalindo and Yelooo Integra

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

The idea behind Garuda Metalindo Tbk and Yelooo Integra Datanet 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.