Correlation Between Golden Eagle and Prima Andalan
Can any of the company-specific risk be diversified away by investing in both Golden Eagle and Prima Andalan 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 Prima Andalan 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 Prima Andalan Mandiri, you can compare the effects of market volatilities on Golden Eagle and Prima Andalan 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 Prima Andalan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Eagle and Prima Andalan.
Diversification Opportunities for Golden Eagle and Prima Andalan
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Prima is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Golden Eagle Energy and Prima Andalan Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Andalan Mandiri 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 Prima Andalan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Andalan Mandiri has no effect on the direction of Golden Eagle i.e., Golden Eagle and Prima Andalan go up and down completely randomly.
Pair Corralation between Golden Eagle and Prima Andalan
Assuming the 90 days trading horizon Golden Eagle Energy is expected to generate 1.54 times more return on investment than Prima Andalan. However, Golden Eagle is 1.54 times more volatile than Prima Andalan Mandiri. It trades about 0.02 of its potential returns per unit of risk. Prima Andalan Mandiri is currently generating about 0.01 per unit of risk. If you would invest 64,628 in Golden Eagle Energy on August 26, 2024 and sell it today you would earn a total of 6,872 from holding Golden Eagle Energy or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Eagle Energy vs. Prima Andalan Mandiri
Performance |
| Timeline |
| Golden Eagle Energy |
| Prima Andalan Mandiri |
Golden Eagle and Prima Andalan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Eagle and Prima Andalan
The main advantage of trading using opposite Golden Eagle and Prima Andalan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Eagle position performs unexpectedly, Prima Andalan 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 Prima Andalan will offset losses from the drop in Prima Andalan's long position.| Golden Eagle vs. Petrosea Tbk | Golden Eagle vs. Harum Energy Tbk | Golden Eagle vs. Perdana Karya Perkasa | Golden Eagle vs. Samindo Resources Tbk |
| Prima Andalan vs. Baramulti Suksessarana Tbk | Prima Andalan vs. Mitrabara Adiperdana PT | Prima Andalan vs. Adaro Minerals Indonesia | Prima Andalan vs. RMK Energy PT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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