Correlation Between Golden Eagle and Alfa Energi
Can any of the company-specific risk be diversified away by investing in both Golden Eagle and Alfa Energi 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 Golden Eagle and Alfa Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Eagle Energy and Alfa Energi Investama, you can compare the effects of market volatilities on Golden Eagle and Alfa Energi 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 Golden Eagle with a short position of Alfa Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Eagle and Alfa Energi.
Diversification Opportunities for Golden Eagle and Alfa Energi
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Alfa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Golden Eagle Energy and Alfa Energi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Energi Investama and Golden Eagle 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 Golden Eagle Energy are associated (or correlated) with Alfa Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Energi Investama has no effect on the direction of Golden Eagle i.e., Golden Eagle and Alfa Energi go up and down completely randomly.
Pair Corralation between Golden Eagle and Alfa Energi
Assuming the 90 days trading horizon Golden Eagle is expected to generate 1.78 times less return on investment than Alfa Energi. But when comparing it to its historical volatility, Golden Eagle Energy is 2.48 times less risky than Alfa Energi. It trades about 0.03 of its potential returns per unit of risk. Alfa Energi Investama is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,100 in Alfa Energi Investama on January 17, 2025 and sell it today you would lose (400.00) from holding Alfa Energi Investama or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Eagle Energy vs. Alfa Energi Investama
Performance |
| Timeline |
| Golden Eagle Energy |
| Alfa Energi Investama |
Golden Eagle and Alfa Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Eagle and Alfa Energi
The main advantage of trading using opposite Golden Eagle and Alfa Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Eagle position performs unexpectedly, Alfa Energi 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 Alfa Energi will offset losses from the drop in Alfa Energi's long position.| Golden Eagle vs. Resource Alam Indonesia | Golden Eagle vs. J Resources Asia | Golden Eagle vs. TBS Energi Utama | Golden Eagle vs. Rukun Raharja Tbk |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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