Correlation Between Hero Supermarket and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Hero Supermarket 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 Hero Supermarket and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hero Supermarket Tbk and Merdeka Copper Gold, you can compare the effects of market volatilities on Hero Supermarket 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 Hero Supermarket with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hero Supermarket and Merdeka Copper.
Diversification Opportunities for Hero Supermarket and Merdeka Copper
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hero and Merdeka is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hero Supermarket Tbk 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 Hero Supermarket 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 Hero Supermarket Tbk 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 Hero Supermarket i.e., Hero Supermarket and Merdeka Copper go up and down completely randomly.
Pair Corralation between Hero Supermarket and Merdeka Copper
Assuming the 90 days trading horizon Hero Supermarket Tbk is expected to generate 0.89 times more return on investment than Merdeka Copper. However, Hero Supermarket Tbk is 1.13 times less risky than Merdeka Copper. It trades about -0.31 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.41 per unit of risk. If you would invest 65,500 in Hero Supermarket Tbk on August 30, 2024 and sell it today you would lose (8,500) from holding Hero Supermarket Tbk or give up 12.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hero Supermarket Tbk vs. Merdeka Copper Gold
Performance |
| Timeline |
| Hero Supermarket Tbk |
| Merdeka Copper Gold |
Hero Supermarket and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hero Supermarket and Merdeka Copper
The main advantage of trading using opposite Hero Supermarket and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hero Supermarket 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.| Hero Supermarket vs. Fast Food Indonesia | Hero Supermarket vs. Enseval Putra Megatrading | Hero Supermarket vs. Matahari Putra Prima | Hero Supermarket vs. Hexindo Adiperkasa Tbk |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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