Correlation Between Bank Negara and AuQ Gold
Can any of the company-specific risk be diversified away by investing in both Bank Negara and AuQ 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 AuQ 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 AuQ Gold Mining, you can compare the effects of market volatilities on Bank Negara and AuQ 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 AuQ Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and AuQ Gold.
Diversification Opportunities for Bank Negara and AuQ Gold
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and AuQ is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and AuQ Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuQ Gold Mining 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 AuQ Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuQ Gold Mining has no effect on the direction of Bank Negara i.e., Bank Negara and AuQ Gold go up and down completely randomly.
Pair Corralation between Bank Negara and AuQ Gold
Assuming the 90 days horizon Bank Negara is expected to generate 2.79 times less return on investment than AuQ Gold. But when comparing it to its historical volatility, Bank Negara Indonesia is 1.5 times less risky than AuQ Gold. It trades about 0.03 of its potential returns per unit of risk. AuQ Gold Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.00 in AuQ Gold Mining on September 12, 2024 and sell it today you would earn a total of 6.00 from holding AuQ Gold Mining or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bank Negara Indonesia vs. AuQ Gold Mining
Performance |
| Timeline |
| Bank Negara Indonesia |
| AuQ Gold Mining |
Bank Negara and AuQ Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and AuQ Gold
The main advantage of trading using opposite Bank Negara and AuQ Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, AuQ 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 AuQ Gold will offset losses from the drop in AuQ Gold's long position.| Bank Negara vs. Banco Bradesco SA | Bank Negara vs. Itau Unibanco Banco | Bank Negara vs. Lloyds Banking Group | Bank Negara vs. Deutsche Bank AG |
| AuQ Gold vs. National CineMedia | AuQ Gold vs. Apogee Enterprises | AuQ Gold vs. Pinterest | AuQ Gold vs. Zedge Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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