Correlation Between Golden Eagle and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Golden Eagle and Weha Transportasi 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 Weha Transportasi 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 Weha Transportasi Indonesia, you can compare the effects of market volatilities on Golden Eagle and Weha Transportasi 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 Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Eagle and Weha Transportasi.
Diversification Opportunities for Golden Eagle and Weha Transportasi
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Weha is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Golden Eagle Energy and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi 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 Weha Transportasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weha Transportasi has no effect on the direction of Golden Eagle i.e., Golden Eagle and Weha Transportasi go up and down completely randomly.
Pair Corralation between Golden Eagle and Weha Transportasi
Assuming the 90 days trading horizon Golden Eagle Energy is expected to generate 1.37 times more return on investment than Weha Transportasi. However, Golden Eagle is 1.37 times more volatile than Weha Transportasi Indonesia. It trades about 0.08 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.16 per unit of risk. If you would invest 71,000 in Golden Eagle Energy on September 4, 2024 and sell it today you would earn a total of 2,500 from holding Golden Eagle Energy or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Golden Eagle Energy vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Golden Eagle Energy |
| Weha Transportasi |
Golden Eagle and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Eagle and Weha Transportasi
The main advantage of trading using opposite Golden Eagle and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Eagle position performs unexpectedly, Weha Transportasi 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 Weha Transportasi will offset losses from the drop in Weha Transportasi's long position.| Golden Eagle vs. Weha Transportasi Indonesia | Golden Eagle vs. Mitra Pinasthika Mustika | Golden Eagle vs. Jakarta Int Hotels | Golden Eagle vs. Asuransi Harta Aman |
| Weha Transportasi vs. Intanwijaya Internasional Tbk | Weha Transportasi vs. Champion Pacific Indonesia | Weha Transportasi vs. Mitra Pinasthika Mustika | Weha Transportasi vs. Jakarta Int Hotels |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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