Correlation Between Indo Acidatama and Galva Technologies

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Indo Acidatama Tbk  vs.  Galva Technologies Tbk

 Performance 
       Timeline  
Indo Acidatama Tbk 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.
The idea behind Indo Acidatama Tbk and Galva Technologies 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments