Correlation Between Perusahaan Perseroan and Orezone Gold

Can any of the company-specific risk be diversified away by investing in both Perusahaan Perseroan and Orezone Gold 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 Perusahaan Perseroan and Orezone Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perusahaan Perseroan PT and Orezone Gold, you can compare the effects of market volatilities on Perusahaan Perseroan and Orezone Gold 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 Perusahaan Perseroan with a short position of Orezone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and Orezone Gold.

Diversification Opportunities for Perusahaan Perseroan and Orezone Gold

-0.38

Correlation Coefficient

Perusahaan Perseroan  Orezone Gold

Very good diversification

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

Pair Corralation between Perusahaan Perseroan and Orezone Gold

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to generate 0.65 times more return on investment than Orezone Gold. However, Perusahaan Perseroan PT is 1.54 times less risky than Orezone Gold. It trades about 0.0 of its potential returns per unit of risk. Orezone Gold is currently generating about -0.12 per unit of risk. If you would invest  1,696  in Perusahaan Perseroan PT on February 21, 2024 and sell it today you would lose (6.00) from holding Perusahaan Perseroan PT or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Perusahaan Perseroan PT  vs.  Orezone Gold

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Orezone Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orezone Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Orezone Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Perusahaan Perseroan and Orezone Gold

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

The idea behind Perusahaan Perseroan PT and Orezone Gold 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.