Correlation Between J Resources and Golden Eagle
Can any of the company-specific risk be diversified away by investing in both J Resources and Golden Eagle 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 J Resources and Golden Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Resources Asia and Golden Eagle Energy, you can compare the effects of market volatilities on J Resources and Golden Eagle 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 J Resources with a short position of Golden Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Golden Eagle.
Diversification Opportunities for J Resources and Golden Eagle
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PSAB and Golden is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia and Golden Eagle Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Eagle Energy and J Resources 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 J Resources Asia are associated (or correlated) with Golden Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Eagle Energy has no effect on the direction of J Resources i.e., J Resources and Golden Eagle go up and down completely randomly.
Pair Corralation between J Resources and Golden Eagle
Assuming the 90 days trading horizon J Resources Asia is expected to generate 3.47 times more return on investment than Golden Eagle. However, J Resources is 3.47 times more volatile than Golden Eagle Energy. It trades about 0.1 of its potential returns per unit of risk. Golden Eagle Energy is currently generating about -0.14 per unit of risk. If you would invest 31,000 in J Resources Asia on August 26, 2024 and sell it today you would earn a total of 1,800 from holding J Resources Asia or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Golden Eagle Energy
Performance |
| Timeline |
| J Resources Asia |
| Golden Eagle Energy |
J Resources and Golden Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Golden Eagle
The main advantage of trading using opposite J Resources and Golden Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources position performs unexpectedly, Golden Eagle 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 Golden Eagle will offset losses from the drop in Golden Eagle's long position.| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
| Golden Eagle vs. Resource Alam Indonesia | Golden Eagle vs. J Resources Asia | Golden Eagle vs. TBS Energi Utama | Golden Eagle vs. Rukun Raharja 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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