Correlation Between GALENA MINING and Telkom Indonesia

Can any of the company-specific risk be diversified away by investing in both GALENA MINING and Telkom 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 GALENA MINING and Telkom Indonesia 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 Telkom Indonesia Tbk, you can compare the effects of market volatilities on GALENA MINING and Telkom 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 GALENA MINING with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and Telkom Indonesia.

Diversification Opportunities for GALENA MINING and Telkom Indonesia

0.0

Correlation Coefficient

GALENA MINING  Telkom Indonesia

Pay attention - limited upside

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

Pair Corralation between GALENA MINING and Telkom Indonesia

If you would invest  3.05  in GALENA MINING LTD on December 22, 2024 and sell it today you would earn a total of  0.00  from holding GALENA MINING LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

GALENA MINING LTD  vs.  Telkom Indonesia Tbk

GALENA MINING LTD

Risk-Adjusted Performance

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.

Telkom Indonesia Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telkom Indonesia Tbk 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 Telkom Indonesia

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

The idea behind GALENA MINING LTD and Telkom Indonesia 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.