Correlation Between Central Omega and PAM Mineral
Can any of the company-specific risk be diversified away by investing in both Central Omega and PAM Mineral 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 Central Omega and PAM Mineral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Omega Resources and PAM Mineral Tbk, you can compare the effects of market volatilities on Central Omega and PAM Mineral 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 Central Omega with a short position of PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Omega and PAM Mineral.
Diversification Opportunities for Central Omega and PAM Mineral
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Central and PAM is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Central Omega Resources and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk and Central Omega 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 Central Omega Resources are associated (or correlated) with PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of Central Omega i.e., Central Omega and PAM Mineral go up and down completely randomly.
Pair Corralation between Central Omega and PAM Mineral
Assuming the 90 days trading horizon Central Omega Resources is expected to generate 0.68 times more return on investment than PAM Mineral. However, Central Omega Resources is 1.48 times less risky than PAM Mineral. It trades about 0.09 of its potential returns per unit of risk. PAM Mineral Tbk is currently generating about 0.03 per unit of risk. If you would invest 9,700 in Central Omega Resources on August 28, 2024 and sell it today you would earn a total of 11,700 from holding Central Omega Resources or generate 120.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Omega Resources vs. PAM Mineral Tbk
Performance |
| Timeline |
| Central Omega Resources |
| PAM Mineral Tbk |
Central Omega and PAM Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Omega and PAM Mineral
The main advantage of trading using opposite Central Omega and PAM Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Omega position performs unexpectedly, PAM Mineral 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 PAM Mineral will offset losses from the drop in PAM Mineral's long position.| Central Omega vs. Cita Mineral Investindo | Central Omega vs. Intiland Development Tbk | Central Omega vs. J Resources Asia | Central Omega vs. Resource Alam Indonesia |
| PAM Mineral vs. Merdeka Copper Gold | PAM Mineral vs. Aneka Tambang Persero | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Timah Persero 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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