Correlation Between Rukun Raharja and Golden Eagle

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

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

Diversification Opportunities for Rukun Raharja and Golden Eagle

-0.63

Correlation Coefficient

Rukun Raharja  Golden Eagle

Excellent diversification

The 3 months correlation between Rukun and Golden is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk 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 Rukun Raharja 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 Rukun Raharja Tbk 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 Rukun Raharja i.e., Rukun Raharja and Golden Eagle go up and down completely randomly.

Pair Corralation between Rukun Raharja and Golden Eagle

Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to under-perform the Golden Eagle. In addition to that, Rukun Raharja is 7.99 times more volatile than Golden Eagle Energy. It trades about -0.06 of its total potential returns per unit of risk. Golden Eagle Energy is currently generating about 0.24 per unit of volatility. If you would invest  73,000  in Golden Eagle Energy on December 30, 2024 and sell it today you would earn a total of  8,500  from holding Golden Eagle Energy or generate 11.64% return on investment over 90 days.

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

Rukun Raharja Tbk  vs.  Golden Eagle Energy

Rukun Raharja Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rukun Raharja Tbk 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Golden Eagle Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Eagle Energy are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Golden Eagle may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Rukun Raharja and Golden Eagle

The main advantage of trading using opposite Rukun Raharja and Golden Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja 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 Rukun Raharja Tbk 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.