Correlation Between Karya Bersama and Golden Eagle

Can any of the company-specific risk be diversified away by investing in both Karya Bersama and Golden Eagle 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 Karya Bersama and Golden Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Karya Bersama Anugerah and Golden Eagle Energy, you can compare the effects of market volatilities on Karya Bersama and Golden Eagle 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 Karya Bersama with a short position of Golden Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karya Bersama and Golden Eagle.

Diversification Opportunities for Karya Bersama and Golden Eagle

0.38

Correlation Coefficient

Karya Bersama  Golden Eagle

Weak diversification

The 3 months correlation between Karya and Golden is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Karya Bersama Anugerah and Golden Eagle Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Eagle Energy and Karya Bersama 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 Karya Bersama Anugerah are associated (or correlated) with Golden Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Eagle Energy has no effect on the direction of Karya Bersama i.e., Karya Bersama and Golden Eagle go up and down completely randomly.

Pair Corralation between Karya Bersama and Golden Eagle

Assuming the 90 days trading horizon Karya Bersama Anugerah is expected to generate 4.86 times more return on investment than Golden Eagle. However, Karya Bersama is 4.86 times more volatile than Golden Eagle Energy. It trades about -0.05 of its potential returns per unit of risk. Golden Eagle Energy is currently generating about -0.34 per unit of risk. If you would invest  2,000  in Karya Bersama Anugerah on October 11, 2024 and sell it today you would lose (100.00) from holding Karya Bersama Anugerah or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Karya Bersama Anugerah  vs.  Golden Eagle Energy

Karya Bersama Anugerah

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karya Bersama Anugerah has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Golden Eagle Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Eagle Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Karya Bersama and Golden Eagle

The main advantage of trading using opposite Karya Bersama and Golden Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karya Bersama position performs unexpectedly, Golden Eagle 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 Golden Eagle will offset losses from the drop in Golden Eagle's long position.

The idea behind Karya Bersama Anugerah and Golden Eagle Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.