Correlation Between Merdeka Copper and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Adaro Minerals 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 Merdeka Copper and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merdeka Copper Gold and Adaro Minerals Indonesia, you can compare the effects of market volatilities on Merdeka Copper and Adaro Minerals 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 Merdeka Copper with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Adaro Minerals.
Diversification Opportunities for Merdeka Copper and Adaro Minerals
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Merdeka and Adaro is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Adaro Minerals Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Minerals Indonesia and Merdeka Copper 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 Merdeka Copper Gold are associated (or correlated) with Adaro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Minerals Indonesia has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Adaro Minerals go up and down completely randomly.
Pair Corralation between Merdeka Copper and Adaro Minerals
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to generate 1.88 times more return on investment than Adaro Minerals. However, Merdeka Copper is 1.88 times more volatile than Adaro Minerals Indonesia. It trades about 0.02 of its potential returns per unit of risk. Adaro Minerals Indonesia is currently generating about -0.16 per unit of risk. If you would invest 163,000 in Merdeka Copper Gold on October 22, 2024 and sell it today you would lose (500.00) from holding Merdeka Copper Gold or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| Merdeka Copper Gold |
| Adaro Minerals Indonesia |
Merdeka Copper and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Adaro Minerals
The main advantage of trading using opposite Merdeka Copper and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Adaro Minerals 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 Adaro Minerals will offset losses from the drop in Adaro Minerals' long position.| Merdeka Copper vs. PT Sarana Menara | Merdeka Copper vs. Tower Bersama Infrastructure | Merdeka Copper vs. Pabrik Kertas Tjiwi | Merdeka Copper vs. Mitra Keluarga Karyasehat |
| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |