Correlation Between HK Metals and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both HK Metals 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 HK Metals and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Metals Utama and Merdeka Copper Gold, you can compare the effects of market volatilities on HK Metals 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 HK Metals with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Metals and Merdeka Copper.
Diversification Opportunities for HK Metals and Merdeka Copper
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKMU and Merdeka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HK Metals Utama 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 HK Metals 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 HK Metals Utama 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 HK Metals i.e., HK Metals and Merdeka Copper go up and down completely randomly.
Pair Corralation between HK Metals and Merdeka Copper
If you would invest 158,000 in Merdeka Copper Gold on November 28, 2024 and sell it today you would lose (3,000) from holding Merdeka Copper Gold or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Metals Utama vs. Merdeka Copper Gold
Performance |
| Timeline |
| HK Metals Utama |
| Merdeka Copper Gold |
HK Metals and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Metals and Merdeka Copper
The main advantage of trading using opposite HK Metals and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Metals 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.| HK Metals vs. PT Indonesia Kendaraan | HK Metals vs. Wijaya Karya Bangunan | HK Metals vs. Buyung Poetra Sembada | HK Metals vs. J Resources Asia |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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