Correlation Between PT UBC and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both PT UBC and Garudafood Putra 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 PT UBC and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT UBC Medical and Garudafood Putra Putri, you can compare the effects of market volatilities on PT UBC and Garudafood Putra 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 PT UBC with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT UBC and Garudafood Putra.
Diversification Opportunities for PT UBC and Garudafood Putra
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LABS and Garudafood is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT UBC Medical and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri and PT UBC 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 PT UBC Medical are associated (or correlated) with Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of PT UBC i.e., PT UBC and Garudafood Putra go up and down completely randomly.
Pair Corralation between PT UBC and Garudafood Putra
Assuming the 90 days trading horizon PT UBC Medical is expected to under-perform the Garudafood Putra. In addition to that, PT UBC is 1.21 times more volatile than Garudafood Putra Putri. It trades about -0.16 of its total potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.13 per unit of volatility. If you would invest 40,400 in Garudafood Putra Putri on December 31, 2024 and sell it today you would lose (4,200) from holding Garudafood Putra Putri or give up 10.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PT UBC Medical vs. Garudafood Putra Putri
Performance |
Timeline |
PT UBC Medical |
Garudafood Putra Putri |
PT UBC and Garudafood Putra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT UBC and Garudafood Putra
The main advantage of trading using opposite PT UBC and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT UBC position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.PT UBC vs. Enseval Putra Megatrading | PT UBC vs. PT Bank Bisnis | PT UBC vs. Tera Data Indonusa | PT UBC vs. Capital Financial Indonesia |
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Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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