Correlation Between Galva Technologies and Maming Enam

Can any of the company-specific risk be diversified away by investing in both Galva Technologies and Maming Enam 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 Galva Technologies and Maming Enam into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Galva Technologies Tbk and Maming Enam Sembilan, you can compare the effects of market volatilities on Galva Technologies and Maming Enam 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 Galva Technologies with a short position of Maming Enam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galva Technologies and Maming Enam.

Diversification Opportunities for Galva Technologies and Maming Enam

0.43

Correlation Coefficient

Galva Technologies  Maming Enam

Very weak diversification

The 3 months correlation between Galva and Maming is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Galva Technologies Tbk and Maming Enam Sembilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maming Enam Sembilan and Galva Technologies 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 Galva Technologies Tbk are associated (or correlated) with Maming Enam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maming Enam Sembilan has no effect on the direction of Galva Technologies i.e., Galva Technologies and Maming Enam go up and down completely randomly.

Pair Corralation between Galva Technologies and Maming Enam

Assuming the 90 days trading horizon Galva Technologies Tbk is expected to generate 0.64 times more return on investment than Maming Enam. However, Galva Technologies Tbk is 1.57 times less risky than Maming Enam. It trades about -0.01 of its potential returns per unit of risk. Maming Enam Sembilan is currently generating about -0.09 per unit of risk. If you would invest  33,200  in Galva Technologies Tbk on December 30, 2024 and sell it today you would lose (1,400) from holding Galva Technologies Tbk or give up 4.22% of portfolio value over 90 days.

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

Galva Technologies Tbk  vs.  Maming Enam Sembilan

Galva Technologies Tbk

Risk-Adjusted Performance

Very Weak

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

Maming Enam Sembilan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maming Enam Sembilan 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Galva Technologies and Maming Enam

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

The idea behind Galva Technologies Tbk and Maming Enam Sembilan 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.