Correlation Between Hoffmen Cleanindo and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Hoffmen Cleanindo 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 Hoffmen Cleanindo and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoffmen Cleanindo and Merdeka Copper Gold, you can compare the effects of market volatilities on Hoffmen Cleanindo 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 Hoffmen Cleanindo with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and Merdeka Copper.
Diversification Opportunities for Hoffmen Cleanindo and Merdeka Copper
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hoffmen and Merdeka is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo i.e., Hoffmen Cleanindo and Merdeka Copper go up and down completely randomly.
Pair Corralation between Hoffmen Cleanindo and Merdeka Copper
Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 0.99 times more return on investment than Merdeka Copper. However, Hoffmen Cleanindo is 1.01 times less risky than Merdeka Copper. It trades about -0.07 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.17 per unit of risk. If you would invest 17,200 in Hoffmen Cleanindo on September 3, 2024 and sell it today you would lose (1,700) from holding Hoffmen Cleanindo or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoffmen Cleanindo vs. Merdeka Copper Gold
Performance |
| Timeline |
| Hoffmen Cleanindo |
| Merdeka Copper Gold |
Hoffmen Cleanindo and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoffmen Cleanindo and Merdeka Copper
The main advantage of trading using opposite Hoffmen Cleanindo and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoffmen Cleanindo 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.| Hoffmen Cleanindo vs. Chandra Asri Petrochemical | Hoffmen Cleanindo vs. Bank Negara Indonesia | Hoffmen Cleanindo vs. Sumber Alfaria Trijaya | Hoffmen Cleanindo vs. Mitra Pinasthika Mustika |
| Merdeka Copper vs. Timah Persero Tbk | Merdeka Copper vs. Semen Indonesia Persero | Merdeka Copper vs. Mitra Pinasthika Mustika | Merdeka Copper vs. Jakarta Int Hotels |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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