Correlation Between Bank Negara and GGX Gold
Can any of the company-specific risk be diversified away by investing in both Bank Negara and GGX Gold 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 Bank Negara and GGX Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and GGX Gold Corp, you can compare the effects of market volatilities on Bank Negara and GGX Gold 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 Bank Negara with a short position of GGX Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and GGX Gold.
Diversification Opportunities for Bank Negara and GGX Gold
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and GGX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and GGX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGX Gold Corp and Bank Negara 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 Bank Negara Indonesia are associated (or correlated) with GGX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGX Gold Corp has no effect on the direction of Bank Negara i.e., Bank Negara and GGX Gold go up and down completely randomly.
Pair Corralation between Bank Negara and GGX Gold
Assuming the 90 days horizon Bank Negara Indonesia is expected to generate 0.49 times more return on investment than GGX Gold. However, Bank Negara Indonesia is 2.03 times less risky than GGX Gold. It trades about -0.17 of its potential returns per unit of risk. GGX Gold Corp is currently generating about -0.2 per unit of risk. If you would invest 1,619 in Bank Negara Indonesia on September 19, 2024 and sell it today you would lose (268.00) from holding Bank Negara Indonesia or give up 16.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Negara Indonesia vs. GGX Gold Corp
Performance |
| Timeline |
| Bank Negara Indonesia |
| GGX Gold Corp |
Bank Negara and GGX Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and GGX Gold
The main advantage of trading using opposite Bank Negara and GGX Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, GGX Gold 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 GGX Gold will offset losses from the drop in GGX Gold's long position.| Bank Negara vs. Morningstar Unconstrained Allocation | Bank Negara vs. Bondbloxx ETF Trust | Bank Negara vs. Spring Valley Acquisition | Bank Negara vs. Bondbloxx ETF Trust |
| GGX Gold vs. GFG Resources | GGX Gold vs. Klondike Gold Corp | GGX Gold vs. Jaguar Mining | GGX Gold vs. Marvel Gold Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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