Correlation Between Tri Banyan and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Tri Banyan 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 Tri Banyan and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tri Banyan Tirta and Garudafood Putra Putri, you can compare the effects of market volatilities on Tri Banyan 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 Tri Banyan with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Banyan and Garudafood Putra.
Diversification Opportunities for Tri Banyan and Garudafood Putra
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tri and Garudafood is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tri Banyan Tirta 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 Tri Banyan 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 Tri Banyan Tirta 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 Tri Banyan i.e., Tri Banyan and Garudafood Putra go up and down completely randomly.
Pair Corralation between Tri Banyan and Garudafood Putra
Assuming the 90 days trading horizon Tri Banyan Tirta is expected to under-perform the Garudafood Putra. In addition to that, Tri Banyan is 3.48 times more volatile than Garudafood Putra Putri. It trades about -2.22 of its total potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.14 per unit of volatility. If you would invest 42,400 in Garudafood Putra Putri on January 29, 2024 and sell it today you would lose (800.00) from holding Garudafood Putra Putri or give up 1.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tri Banyan Tirta vs. Garudafood Putra Putri
Performance |
Timeline |
Tri Banyan Tirta |
Garudafood Putra Putri |
Tri Banyan and Garudafood Putra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tri Banyan and Garudafood Putra
The main advantage of trading using opposite Tri Banyan and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri Banyan 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.Tri Banyan vs. Astra International Tbk | Tri Banyan vs. Telkom Indonesia Tbk | Tri Banyan vs. Kalbe Farma Tbk |
Garudafood Putra vs. Astra International Tbk | Garudafood Putra vs. Telkom Indonesia Tbk | Garudafood Putra vs. Kalbe Farma Tbk |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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