Correlation Between Galva Technologies and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Galva Technologies and Garudafood Putra 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 Garudafood Putra 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 Garudafood Putra Putri, you can compare the effects of market volatilities on Galva Technologies and Garudafood Putra 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 Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galva Technologies and Garudafood Putra.
Diversification Opportunities for Galva Technologies and Garudafood Putra
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Galva and Garudafood is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Galva Technologies Tbk and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri 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 Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of Galva Technologies i.e., Galva Technologies and Garudafood Putra go up and down completely randomly.
Pair Corralation between Galva Technologies and Garudafood Putra
Assuming the 90 days trading horizon Galva Technologies Tbk is expected to generate 3.29 times more return on investment than Garudafood Putra. However, Galva Technologies is 3.29 times more volatile than Garudafood Putra Putri. It trades about 0.0 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.03 per unit of risk. If you would invest 51,534 in Galva Technologies Tbk on August 30, 2024 and sell it today you would lose (16,334) from holding Galva Technologies Tbk or give up 31.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galva Technologies Tbk vs. Garudafood Putra Putri
Performance |
| Timeline |
| Galva Technologies Tbk |
| Garudafood Putra Putri |
Galva Technologies and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galva Technologies and Garudafood Putra
The main advantage of trading using opposite Galva Technologies and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galva Technologies position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra'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 |
| Garudafood Putra vs. Sariguna Primatirta PT | Garudafood Putra vs. Ultra Jaya Milk | Garudafood Putra vs. Nippon Indosari Corpindo | Garudafood Putra vs. Kino Indonesia Tbk |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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