Correlation Between Mitrabahtera Segara and Garudafood Putra

Can any of the company-specific risk be diversified away by investing in both Mitrabahtera Segara 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 Mitrabahtera Segara and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitrabahtera Segara Sejati and Garudafood Putra Putri, you can compare the effects of market volatilities on Mitrabahtera Segara 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 Mitrabahtera Segara with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabahtera Segara and Garudafood Putra.

Diversification Opportunities for Mitrabahtera Segara and Garudafood Putra

0.12

Correlation Coefficient

Mitrabahtera Segara  Garudafood Putra

Average diversification

The 3 months correlation between Mitrabahtera and Garudafood is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabahtera Segara Sejati 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 Mitrabahtera Segara 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 Mitrabahtera Segara Sejati 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 Mitrabahtera Segara i.e., Mitrabahtera Segara and Garudafood Putra go up and down completely randomly.

Pair Corralation between Mitrabahtera Segara and Garudafood Putra

Assuming the 90 days trading horizon Mitrabahtera Segara Sejati is expected to generate 1.92 times more return on investment than Garudafood Putra. However, Mitrabahtera Segara is 1.92 times more volatile than Garudafood Putra Putri. It trades about 0.0 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.01 per unit of risk. If you would invest  121,000  in Mitrabahtera Segara Sejati on October 7, 2024 and sell it today you would lose (19,000) from holding Mitrabahtera Segara Sejati or give up 15.7% of portfolio value over 90 days.

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

Mitrabahtera Segara Sejati  vs.  Garudafood Putra Putri

Mitrabahtera Segara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitrabahtera Segara Sejati 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.

Garudafood Putra Putri

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Garudafood Putra Putri are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Garudafood Putra 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 Mitrabahtera Segara and Garudafood Putra

The main advantage of trading using opposite Mitrabahtera Segara and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabahtera Segara 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.

The idea behind Mitrabahtera Segara Sejati and Garudafood Putra Putri 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.