Correlation Between Merdeka Copper and Adi Sarana
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Adi Sarana 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 Adi Sarana 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 Adi Sarana Armada, you can compare the effects of market volatilities on Merdeka Copper and Adi Sarana 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 Adi Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Adi Sarana.
Diversification Opportunities for Merdeka Copper and Adi Sarana
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merdeka and Adi is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada 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 Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Adi Sarana go up and down completely randomly.
Pair Corralation between Merdeka Copper and Adi Sarana
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Adi Sarana. In addition to that, Merdeka Copper is 1.09 times more volatile than Adi Sarana Armada. It trades about -0.01 of its total potential returns per unit of risk. Adi Sarana Armada is currently generating about 0.02 per unit of volatility. If you would invest 69,882 in Adi Sarana Armada on August 25, 2024 and sell it today you would earn a total of 2,118 from holding Adi Sarana Armada or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Adi Sarana Armada
Performance |
| Timeline |
| Merdeka Copper Gold |
| Adi Sarana Armada |
Merdeka Copper and Adi Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Adi Sarana
The main advantage of trading using opposite Merdeka Copper and Adi Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Adi Sarana 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 Adi Sarana will offset losses from the drop in Adi Sarana'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 |
| Adi Sarana vs. Surya Esa Perkasa | Adi Sarana vs. Tower Bersama Infrastructure | Adi Sarana vs. Erajaya Swasembada Tbk | Adi Sarana vs. Bekasi Fajar Industrial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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