Correlation Between Garda Tujuh and Protech Mitra

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

Diversification Opportunities for Garda Tujuh and Protech Mitra

0.77

Correlation Coefficient

Garda Tujuh  Protech Mitra

Poor diversification

The 3 months correlation between Garda and Protech is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa 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 Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Protech Mitra go up and down completely randomly.

Pair Corralation between Garda Tujuh and Protech Mitra

Assuming the 90 days trading horizon Garda Tujuh Buana is expected to under-perform the Protech Mitra. But the stock apears to be less risky and, when comparing its historical volatility, Garda Tujuh Buana is 1.01 times less risky than Protech Mitra. The stock trades about -0.28 of its potential returns per unit of risk. The Protech Mitra Perkasa is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,100  in Protech Mitra Perkasa on December 30, 2024 and sell it today you would lose (1,400) from holding Protech Mitra Perkasa or give up 9.93% 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.  Protech Mitra Perkasa

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.

Protech Mitra Perkasa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Protech Mitra Perkasa 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 Protech Mitra

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

The idea behind Garda Tujuh Buana and Protech Mitra Perkasa 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.