Correlation Between Golden Eagle and J Resources
Can any of the company-specific risk be diversified away by investing in both Golden Eagle and J Resources 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 J Resources 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 J Resources Asia, you can compare the effects of market volatilities on Golden Eagle and J Resources 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 J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Eagle and J Resources.
Diversification Opportunities for Golden Eagle and J Resources
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Golden and PSAB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Golden Eagle Energy and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia 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 J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Golden Eagle i.e., Golden Eagle and J Resources go up and down completely randomly.
Pair Corralation between Golden Eagle and J Resources
Assuming the 90 days trading horizon Golden Eagle Energy is expected to generate 0.14 times more return on investment than J Resources. However, Golden Eagle Energy is 7.09 times less risky than J Resources. It trades about 0.0 of its potential returns per unit of risk. J Resources Asia is currently generating about -0.13 per unit of risk. If you would invest 73,000 in Golden Eagle Energy on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Golden Eagle Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Eagle Energy vs. J Resources Asia
Performance |
| Timeline |
| Golden Eagle Energy |
| J Resources Asia |
Golden Eagle and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Eagle and J Resources
The main advantage of trading using opposite Golden Eagle and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Eagle position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' 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 |
| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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