Correlation Between Visi Media and Garuda Indonesia

Can any of the company-specific risk be diversified away by investing in both Visi Media and Garuda Indonesia 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 Visi Media and Garuda Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visi Media Asia and Garuda Indonesia Persero, you can compare the effects of market volatilities on Visi Media and Garuda Indonesia 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 Visi Media with a short position of Garuda Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visi Media and Garuda Indonesia.

Diversification Opportunities for Visi Media and Garuda Indonesia

0.0

Correlation Coefficient

Visi Media  Garuda Indonesia

Pay attention - limited upside

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

Pair Corralation between Visi Media and Garuda Indonesia

If you would invest  600.00  in Visi Media Asia on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Visi Media Asia or generate 0.0% return on investment over 90 days.

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

Visi Media Asia  vs.  Garuda Indonesia Persero

Visi Media Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visi Media Asia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Visi Media is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Garuda Indonesia Persero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Garuda Indonesia Persero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Garuda Indonesia 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 Visi Media and Garuda Indonesia

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

The idea behind Visi Media Asia and Garuda Indonesia Persero 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.