Correlation Between Galva Technologies and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Galva Technologies and Ace Hardware 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 Ace Hardware 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 Ace Hardware Indonesia, you can compare the effects of market volatilities on Galva Technologies and Ace Hardware 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 Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galva Technologies and Ace Hardware.
Diversification Opportunities for Galva Technologies and Ace Hardware
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galva and Ace is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Galva Technologies Tbk and Ace Hardware Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Hardware Indonesia 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 Ace Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Hardware Indonesia has no effect on the direction of Galva Technologies i.e., Galva Technologies and Ace Hardware go up and down completely randomly.
Pair Corralation between Galva Technologies and Ace Hardware
Assuming the 90 days trading horizon Galva Technologies is expected to generate 3.86 times less return on investment than Ace Hardware. In addition to that, Galva Technologies is 1.62 times more volatile than Ace Hardware Indonesia. It trades about 0.01 of its total potential returns per unit of risk. Ace Hardware Indonesia is currently generating about 0.06 per unit of volatility. If you would invest 42,159 in Ace Hardware Indonesia on August 27, 2024 and sell it today you would earn a total of 36,841 from holding Ace Hardware Indonesia or generate 87.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Galva Technologies Tbk vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Galva Technologies Tbk |
| Ace Hardware Indonesia |
Galva Technologies and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galva Technologies and Ace Hardware
The main advantage of trading using opposite Galva Technologies and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galva Technologies position performs unexpectedly, Ace Hardware 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 Ace Hardware will offset losses from the drop in Ace Hardware's long position.| Galva Technologies vs. Multipolar Technology Tbk | Galva Technologies vs. Nusantara Voucher Distribution | Galva Technologies vs. Hensel Davest Indonesia | Galva Technologies vs. Anabatic Technologies Tbk |
| Ace Hardware vs. Japfa Comfeed Indonesia | Ace Hardware vs. Charoen Pokphand Indonesia | Ace Hardware vs. Erajaya Swasembada Tbk | Ace Hardware vs. Indofood Cbp Sukses |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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