Correlation Between Garda Tujuh and Makmur Berkah

Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and Makmur Berkah 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 Garda Tujuh and Makmur Berkah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garda Tujuh Buana and Makmur Berkah Amanda, you can compare the effects of market volatilities on Garda Tujuh and Makmur Berkah 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 Garda Tujuh with a short position of Makmur Berkah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and Makmur Berkah.

Diversification Opportunities for Garda Tujuh and Makmur Berkah

0.63

Correlation Coefficient

Garda Tujuh  Makmur Berkah

Poor diversification

The 3 months correlation between Garda and Makmur is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Makmur Berkah Amanda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makmur Berkah Amanda and Garda Tujuh 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 Garda Tujuh Buana are associated (or correlated) with Makmur Berkah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makmur Berkah Amanda has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Makmur Berkah go up and down completely randomly.

Pair Corralation between Garda Tujuh and Makmur Berkah

Assuming the 90 days trading horizon Garda Tujuh Buana is expected to generate 1.49 times more return on investment than Makmur Berkah. However, Garda Tujuh is 1.49 times more volatile than Makmur Berkah Amanda. It trades about -0.36 of its potential returns per unit of risk. Makmur Berkah Amanda is currently generating about -0.64 per unit of risk. If you would invest  24,400  in Garda Tujuh Buana on October 12, 2024 and sell it today you would lose (2,600) from holding Garda Tujuh Buana or give up 10.66% of portfolio value over 90 days.

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

Garda Tujuh Buana  vs.  Makmur Berkah Amanda

Garda Tujuh Buana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Garda Tujuh Buana 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Makmur Berkah Amanda

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Makmur Berkah Amanda has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Garda Tujuh and Makmur Berkah

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

The idea behind Garda Tujuh Buana and Makmur Berkah Amanda 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..