Correlation Between Indo Acidatama and Galva Technologies
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Galva Technologies 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 Indo Acidatama and Galva Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Acidatama Tbk and Galva Technologies Tbk, you can compare the effects of market volatilities on Indo Acidatama and Galva Technologies 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 Indo Acidatama with a short position of Galva Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Galva Technologies.
Diversification Opportunities for Indo Acidatama and Galva Technologies
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Indo and Galva is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Galva Technologies Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galva Technologies Tbk and Indo Acidatama 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 Indo Acidatama Tbk are associated (or correlated) with Galva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galva Technologies Tbk has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Galva Technologies go up and down completely randomly.
Pair Corralation between Indo Acidatama and Galva Technologies
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 0.27 times more return on investment than Galva Technologies. However, Indo Acidatama Tbk is 3.68 times less risky than Galva Technologies. It trades about 0.0 of its potential returns per unit of risk. Galva Technologies Tbk is currently generating about -0.09 per unit of risk. If you would invest 5,000 in Indo Acidatama Tbk on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Indo Acidatama Tbk or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Indo Acidatama Tbk vs. Galva Technologies Tbk
Performance |
Timeline |
Indo Acidatama Tbk |
Galva Technologies Tbk |
Indo Acidatama and Galva Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indo Acidatama and Galva Technologies
The main advantage of trading using opposite Indo Acidatama and Galva Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Galva Technologies 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 Galva Technologies will offset losses from the drop in Galva Technologies' long position.Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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