Correlation Between Aneka Tambang and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Merdeka Copper 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 Aneka Tambang and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Persero and Merdeka Copper Gold, you can compare the effects of market volatilities on Aneka Tambang and Merdeka Copper 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 Aneka Tambang with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Merdeka Copper.
Diversification Opportunities for Aneka Tambang and Merdeka Copper
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aneka and Merdeka is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Merdeka Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merdeka Copper Gold and Aneka Tambang 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 Aneka Tambang Persero are associated (or correlated) with Merdeka Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merdeka Copper Gold has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Merdeka Copper go up and down completely randomly.
Pair Corralation between Aneka Tambang and Merdeka Copper
Assuming the 90 days trading horizon Aneka Tambang Persero is expected to generate 0.73 times more return on investment than Merdeka Copper. However, Aneka Tambang Persero is 1.37 times less risky than Merdeka Copper. It trades about -0.02 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.05 per unit of risk. If you would invest 197,852 in Aneka Tambang Persero on August 26, 2024 and sell it today you would lose (52,852) from holding Aneka Tambang Persero or give up 26.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Aneka Tambang Persero vs. Merdeka Copper Gold
Performance |
| Timeline |
| Aneka Tambang Persero |
| Merdeka Copper Gold |
Aneka Tambang and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Merdeka Copper
The main advantage of trading using opposite Aneka Tambang and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Merdeka Copper 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 Merdeka Copper will offset losses from the drop in Merdeka Copper's long position.| Aneka Tambang vs. Perusahaan Gas Negara | Aneka Tambang vs. Vale Indonesia Tbk | Aneka Tambang vs. Bukit Asam Tbk | Aneka Tambang vs. Telkom Indonesia Tbk |
| Merdeka Copper vs. PT Sarana Menara | Merdeka Copper vs. Tower Bersama Infrastructure | Merdeka Copper vs. Pabrik Kertas Tjiwi | Merdeka Copper vs. Mitra Keluarga Karyasehat |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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