Correlation Between Garda Tujuh and Japfa Comfeed

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

Diversification Opportunities for Garda Tujuh and Japfa Comfeed

-0.69

Correlation Coefficient

Garda Tujuh  Japfa Comfeed

Excellent diversification

The 3 months correlation between Garda and Japfa is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Japfa Comfeed Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japfa Comfeed 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 Japfa Comfeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japfa Comfeed Indonesia has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Japfa Comfeed go up and down completely randomly.

Pair Corralation between Garda Tujuh and Japfa Comfeed

Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the Japfa Comfeed. In addition to that, Garda Tujuh is 1.34 times more volatile than Japfa Comfeed Indonesia. It trades about -0.28 of its total potential returns per unit of risk. Japfa Comfeed Indonesia is currently generating about 0.04 per unit of volatility. If you would invest  194,000  in Japfa Comfeed Indonesia on December 30, 2024 and sell it today you would earn a total of  7,000  from holding Japfa Comfeed Indonesia or generate 3.61% return on investment over 90 days.

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

Garda Tujuh Buana  vs.  Japfa Comfeed Indonesia

Garda Tujuh Buana

Risk-Adjusted Performance

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

Japfa Comfeed Indonesia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Japfa Comfeed Indonesia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Japfa Comfeed is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Garda Tujuh and Japfa Comfeed

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

The idea behind Garda Tujuh Buana and Japfa Comfeed 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.