Correlation Between Galva Technologies and Nanotech Indonesia
Can any of the company-specific risk be diversified away by investing in both Galva Technologies and Nanotech Indonesia 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 Nanotech Indonesia 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 Nanotech Indonesia Global, you can compare the effects of market volatilities on Galva Technologies and Nanotech Indonesia 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 Nanotech Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galva Technologies and Nanotech Indonesia.
Diversification Opportunities for Galva Technologies and Nanotech Indonesia
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Galva and Nanotech is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Galva Technologies Tbk and Nanotech Indonesia Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanotech Indonesia Global 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 Nanotech Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanotech Indonesia Global has no effect on the direction of Galva Technologies i.e., Galva Technologies and Nanotech Indonesia go up and down completely randomly.
Pair Corralation between Galva Technologies and Nanotech Indonesia
Assuming the 90 days trading horizon Galva Technologies is expected to generate 2.05 times less return on investment than Nanotech Indonesia. In addition to that, Galva Technologies is 1.2 times more volatile than Nanotech Indonesia Global. It trades about 0.0 of its total potential returns per unit of risk. Nanotech Indonesia Global is currently generating about 0.01 per unit of volatility. If you would invest 2,500 in Nanotech Indonesia Global on August 30, 2024 and sell it today you would lose (300.00) from holding Nanotech Indonesia Global or give up 12.0% 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. Nanotech Indonesia Global
Performance |
| Timeline |
| Galva Technologies Tbk |
| Nanotech Indonesia Global |
Galva Technologies and Nanotech Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galva Technologies and Nanotech Indonesia
The main advantage of trading using opposite Galva Technologies and Nanotech Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galva Technologies position performs unexpectedly, Nanotech Indonesia 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 Nanotech Indonesia will offset losses from the drop in Nanotech Indonesia'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 |
| Nanotech Indonesia vs. Sumber Tani Agung | Nanotech Indonesia vs. Dayamitra Telekomunikasi PT | Nanotech Indonesia vs. Wir Asia Tbk | Nanotech Indonesia vs. Integra Indocabinet 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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