Correlation Between FANDIFI TECHNOLOGY and GUDANG GARAM

Can any of the company-specific risk be diversified away by investing in both FANDIFI TECHNOLOGY and GUDANG GARAM 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 FANDIFI TECHNOLOGY and GUDANG GARAM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FANDIFI TECHNOLOGY P and GUDANG GARAM, you can compare the effects of market volatilities on FANDIFI TECHNOLOGY and GUDANG GARAM 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 FANDIFI TECHNOLOGY with a short position of GUDANG GARAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of FANDIFI TECHNOLOGY and GUDANG GARAM.

Diversification Opportunities for FANDIFI TECHNOLOGY and GUDANG GARAM

0.0

Correlation Coefficient

FANDIFI TECHNOLOGY  GUDANG GARAM

Pay attention - limited upside

The 3 months correlation between FANDIFI and GUDANG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANDIFI TECHNOLOGY P and GUDANG GARAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUDANG GARAM and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P are associated (or correlated) with GUDANG GARAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUDANG GARAM has no effect on the direction of FANDIFI TECHNOLOGY i.e., FANDIFI TECHNOLOGY and GUDANG GARAM go up and down completely randomly.

Pair Corralation between FANDIFI TECHNOLOGY and GUDANG GARAM

Assuming the 90 days horizon FANDIFI TECHNOLOGY P is expected to generate 11.02 times more return on investment than GUDANG GARAM. However, FANDIFI TECHNOLOGY is 11.02 times more volatile than GUDANG GARAM. It trades about 0.04 of its potential returns per unit of risk. GUDANG GARAM is currently generating about -0.01 per unit of risk. If you would invest  3.55  in FANDIFI TECHNOLOGY P on October 4, 2024 and sell it today you would lose (3.50) from holding FANDIFI TECHNOLOGY P or give up 98.59% of portfolio value over 90 days.

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

FANDIFI TECHNOLOGY P  vs.  GUDANG GARAM

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

GUDANG GARAM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GUDANG GARAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with FANDIFI TECHNOLOGY and GUDANG GARAM

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

The idea behind FANDIFI TECHNOLOGY P and GUDANG GARAM 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.