Correlation Between Golden Eagle and Harum Energy
Can any of the company-specific risk be diversified away by investing in both Golden Eagle and Harum Energy 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 Harum Energy 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 Harum Energy Tbk, you can compare the effects of market volatilities on Golden Eagle and Harum Energy 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 Harum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Eagle and Harum Energy.
Diversification Opportunities for Golden Eagle and Harum Energy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Harum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Golden Eagle Energy and Harum Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harum Energy Tbk 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 Harum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harum Energy Tbk has no effect on the direction of Golden Eagle i.e., Golden Eagle and Harum Energy go up and down completely randomly.
Pair Corralation between Golden Eagle and Harum Energy
Assuming the 90 days trading horizon Golden Eagle Energy is expected to generate 1.24 times more return on investment than Harum Energy. However, Golden Eagle is 1.24 times more volatile than Harum Energy Tbk. It trades about 0.07 of its potential returns per unit of risk. Harum Energy Tbk is currently generating about -0.12 per unit of risk. If you would invest 74,000 in Golden Eagle Energy on August 30, 2024 and sell it today you would earn a total of 2,500 from holding Golden Eagle Energy or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Eagle Energy vs. Harum Energy Tbk
Performance |
| Timeline |
| Golden Eagle Energy |
| Harum Energy Tbk |
Golden Eagle and Harum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Eagle and Harum Energy
The main advantage of trading using opposite Golden Eagle and Harum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Eagle position performs unexpectedly, Harum Energy 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 Harum Energy will offset losses from the drop in Harum Energy'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 |
| Harum Energy vs. Indo Tambangraya Megah | Harum Energy vs. Indika Energy Tbk | Harum Energy vs. Adaro Energy Tbk | Harum Energy vs. Akr Corporindo 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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