Correlation Between Garudafood Putra and Estika Tata

Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Estika Tata 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 Estika Tata 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 Estika Tata Tiara, you can compare the effects of market volatilities on Garudafood Putra and Estika Tata 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 Estika Tata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Estika Tata.

Diversification Opportunities for Garudafood Putra and Estika Tata

-0.4

Correlation Coefficient

Garudafood Putra  Estika Tata

Very good diversification

The 3 months correlation between Garudafood and Estika is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Estika Tata Tiara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estika Tata Tiara 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 Estika Tata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estika Tata Tiara has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Estika Tata go up and down completely randomly.

Pair Corralation between Garudafood Putra and Estika Tata

Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.94 times more return on investment than Estika Tata. However, Garudafood Putra Putri is 1.06 times less risky than Estika Tata. It trades about -0.17 of its potential returns per unit of risk. Estika Tata Tiara is currently generating about -0.31 per unit of risk. If you would invest  43,800  in Garudafood Putra Putri on September 3, 2024 and sell it today you would lose (3,800) from holding Garudafood Putra Putri or give up 8.68% of portfolio value over 90 days.

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

Garudafood Putra Putri  vs.  Estika Tata Tiara

Garudafood Putra Putri

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Garudafood Putra Putri are ranked lower than 6 (%) 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.

Estika Tata Tiara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Estika Tata Tiara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Garudafood Putra and Estika Tata

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

The idea behind Garudafood Putra Putri and Estika Tata Tiara 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.