Correlation Between GALENA MINING and GUDANG GARAM

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

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

Diversification Opportunities for GALENA MINING and GUDANG GARAM

0.0

Correlation Coefficient

GALENA MINING  GUDANG GARAM

Pay attention - limited upside

The 3 months correlation between GALENA and GUDANG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and GUDANG GARAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUDANG GARAM and GALENA MINING 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 GALENA MINING LTD 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 GALENA MINING i.e., GALENA MINING and GUDANG GARAM go up and down completely randomly.

Pair Corralation between GALENA MINING and GUDANG GARAM

If you would invest  74.00  in GUDANG GARAM on September 12, 2024 and sell it today you would earn a total of  5.00  from holding GUDANG GARAM or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

GALENA MINING LTD  vs.  GUDANG GARAM

GALENA MINING LTD

Risk-Adjusted Performance

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Very Weak

Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The current 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 latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with GALENA MINING and GUDANG GARAM

The main advantage of trading using opposite GALENA MINING and GUDANG GARAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING 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 GALENA MINING LTD 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.