Correlation Between Garda Tujuh and Meta Epsi

Can any of the company-specific risk be diversified away by investing in both Garda Tujuh and Meta Epsi 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 Garda Tujuh and Meta Epsi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garda Tujuh Buana and Meta Epsi Tbk, you can compare the effects of market volatilities on Garda Tujuh and Meta Epsi 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 Garda Tujuh with a short position of Meta Epsi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Tujuh and Meta Epsi.

Diversification Opportunities for Garda Tujuh and Meta Epsi

0.78

Correlation Coefficient

Garda Tujuh  Meta Epsi

Poor diversification

The 3 months correlation between Garda and Meta is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Garda Tujuh Buana and Meta Epsi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Epsi Tbk and Garda Tujuh 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 Garda Tujuh Buana are associated (or correlated) with Meta Epsi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Epsi Tbk has no effect on the direction of Garda Tujuh i.e., Garda Tujuh and Meta Epsi go up and down completely randomly.

Pair Corralation between Garda Tujuh and Meta Epsi

Assuming the 90 days trading horizon Garda Tujuh is expected to generate 2.75 times less return on investment than Meta Epsi. In addition to that, Garda Tujuh is 1.64 times more volatile than Meta Epsi Tbk. It trades about 0.1 of its total potential returns per unit of risk. Meta Epsi Tbk is currently generating about 0.47 per unit of volatility. If you would invest  1,100  in Meta Epsi Tbk on April 25, 2025 and sell it today you would earn a total of  3,100  from holding Meta Epsi Tbk or generate 281.82% return on investment over 90 days.

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

Garda Tujuh Buana  vs.  Meta Epsi Tbk

Garda Tujuh Buana

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garda Tujuh Buana are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Garda Tujuh disclosed solid returns over the last few months and may actually be approaching a breakup point.

Meta Epsi Tbk

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Epsi Tbk are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Meta Epsi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garda Tujuh and Meta Epsi

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

The idea behind Garda Tujuh Buana and Meta Epsi Tbk 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.