Correlation Between Garda Tujuh and Fortune Mate

Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and Fortune Mate 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 Fortune Mate 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 Fortune Mate Indonesia, you can compare the effects of market volatilities on Garda Tujuh and Fortune Mate 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 Fortune Mate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and Fortune Mate.

Diversification Opportunities for Garda Tujuh and Fortune Mate

-0.9

Correlation Coefficient

Garda Tujuh  Fortune Mate

Pay attention - limited upside

The 3 months correlation between Garda and Fortune is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Fortune Mate Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Mate Indonesia 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 Fortune Mate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Mate Indonesia has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Fortune Mate go up and down completely randomly.

Pair Corralation between Garda Tujuh and Fortune Mate

Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the Fortune Mate. But the stock apears to be less risky and, when comparing its historical volatility, Garda Tujuh Buana is 4.25 times less risky than Fortune Mate. The stock trades about -0.12 of its potential returns per unit of risk. The Fortune Mate Indonesia is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  25,000  in Fortune Mate Indonesia on September 13, 2024 and sell it today you would earn a total of  29,500  from holding Fortune Mate Indonesia or generate 118.0% return on investment over 90 days.

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

Garda Tujuh Buana  vs.  Fortune Mate Indonesia

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Fortune Mate Indonesia

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Mate Indonesia are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fortune Mate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garda Tujuh and Fortune Mate

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

The idea behind Garda Tujuh Buana and Fortune Mate Indonesia 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.