Correlation Between Galva Technologies and Ashmore Asset
Can any of the company-specific risk be diversified away by investing in both Galva Technologies and Ashmore Asset 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 Ashmore Asset 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 Ashmore Asset Management, you can compare the effects of market volatilities on Galva Technologies and Ashmore Asset 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 Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galva Technologies and Ashmore Asset.
Diversification Opportunities for Galva Technologies and Ashmore Asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galva and Ashmore is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Galva Technologies Tbk and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management 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 Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of Galva Technologies i.e., Galva Technologies and Ashmore Asset go up and down completely randomly.
Pair Corralation between Galva Technologies and Ashmore Asset
Assuming the 90 days trading horizon Galva Technologies Tbk is expected to generate 1.6 times more return on investment than Ashmore Asset. However, Galva Technologies is 1.6 times more volatile than Ashmore Asset Management. It trades about 0.0 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.02 per unit of risk. If you would invest 52,939 in Galva Technologies Tbk on August 27, 2024 and sell it today you would lose (17,939) from holding Galva Technologies Tbk or give up 33.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galva Technologies Tbk vs. Ashmore Asset Management
Performance |
| Timeline |
| Galva Technologies Tbk |
| Ashmore Asset Management |
Galva Technologies and Ashmore Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galva Technologies and Ashmore Asset
The main advantage of trading using opposite Galva Technologies and Ashmore Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galva Technologies position performs unexpectedly, Ashmore Asset 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 Ashmore Asset will offset losses from the drop in Ashmore Asset'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 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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