Correlation Between Europac Gold and Idx Risk

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

By analyzing existing cross correlation between Europac Gold Fund and Idx Risk Managed Bitcoin, you can compare the effects of market volatilities on Europac Gold and Idx Risk 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 Europac Gold with a short position of Idx Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Idx Risk.

Diversification Opportunities for Europac Gold and Idx Risk

-0.56

Correlation Coefficient

Europac Gold  Idx Risk

Excellent diversification

The 3 months correlation between Europac and Idx is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Idx Risk Managed Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idx Risk Managed and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Idx Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idx Risk Managed has no effect on the direction of Europac Gold i.e., Europac Gold and Idx Risk go up and down completely randomly.

Pair Corralation between Europac Gold and Idx Risk

Assuming the 90 days horizon Europac Gold Fund is expected to generate 0.42 times more return on investment than Idx Risk. However, Europac Gold Fund is 2.39 times less risky than Idx Risk. It trades about 0.1 of its potential returns per unit of risk. Idx Risk Managed Bitcoin is currently generating about -0.06 per unit of risk. If you would invest  951.00  in Europac Gold Fund on September 16, 2024 and sell it today you would earn a total of  36.00  from holding Europac Gold Fund or generate 3.79% return on investment over 90 days.

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

Europac Gold Fund  vs.  Idx Risk Managed Bitcoin

Europac Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europac Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Europac Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Idx Risk Managed

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Idx Risk Managed Bitcoin are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Idx Risk showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Europac Gold and Idx Risk

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

The idea behind Europac Gold Fund and Idx Risk Managed Bitcoin 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.