Correlation Between Merdeka Copper and Arthavest Tbk
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Arthavest Tbk 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 Arthavest Tbk 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 Arthavest Tbk, you can compare the effects of market volatilities on Merdeka Copper and Arthavest Tbk 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 Arthavest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Arthavest Tbk.
Diversification Opportunities for Merdeka Copper and Arthavest Tbk
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and Arthavest is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Arthavest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthavest Tbk 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 Arthavest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthavest Tbk has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Arthavest Tbk go up and down completely randomly.
Pair Corralation between Merdeka Copper and Arthavest Tbk
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to generate 2.37 times more return on investment than Arthavest Tbk. However, Merdeka Copper is 2.37 times more volatile than Arthavest Tbk. It trades about -0.01 of its potential returns per unit of risk. Arthavest Tbk is currently generating about -0.08 per unit of risk. If you would invest 226,000 in Merdeka Copper Gold on August 27, 2024 and sell it today you would lose (22,000) from holding Merdeka Copper Gold or give up 9.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Arthavest Tbk
Performance |
| Timeline |
| Merdeka Copper Gold |
| Arthavest Tbk |
Merdeka Copper and Arthavest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Arthavest Tbk
The main advantage of trading using opposite Merdeka Copper and Arthavest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Arthavest Tbk 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 Arthavest Tbk will offset losses from the drop in Arthavest Tbk's 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 |
| Arthavest Tbk vs. Asuransi Bintang Tbk | Arthavest Tbk vs. Pacific Strategic Financial | Arthavest Tbk vs. Maming Enam Sembilan | Arthavest Tbk vs. Asuransi Harta Aman |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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