Correlation Between Merdeka Copper and Trimitra Prawara
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Trimitra Prawara 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 Trimitra Prawara 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 Trimitra Prawara Goldland, you can compare the effects of market volatilities on Merdeka Copper and Trimitra Prawara 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 Trimitra Prawara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Trimitra Prawara.
Diversification Opportunities for Merdeka Copper and Trimitra Prawara
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Merdeka and Trimitra is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Trimitra Prawara Goldland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Prawara Goldland 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 Trimitra Prawara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Prawara Goldland has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Trimitra Prawara go up and down completely randomly.
Pair Corralation between Merdeka Copper and Trimitra Prawara
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to generate 0.71 times more return on investment than Trimitra Prawara. However, Merdeka Copper Gold is 1.4 times less risky than Trimitra Prawara. It trades about -0.05 of its potential returns per unit of risk. Trimitra Prawara Goldland is currently generating about -0.05 per unit of risk. If you would invest 436,000 in Merdeka Copper Gold on September 3, 2024 and sell it today you would lose (251,000) from holding Merdeka Copper Gold or give up 57.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Trimitra Prawara Goldland
Performance |
| Timeline |
| Merdeka Copper Gold |
| Trimitra Prawara Goldland |
Merdeka Copper and Trimitra Prawara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Trimitra Prawara
The main advantage of trading using opposite Merdeka Copper and Trimitra Prawara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Trimitra Prawara 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 Trimitra Prawara will offset losses from the drop in Trimitra Prawara's long position.| Merdeka Copper vs. Timah Persero Tbk | Merdeka Copper vs. Semen Indonesia Persero | Merdeka Copper vs. Mitra Pinasthika Mustika | Merdeka Copper vs. Jakarta Int Hotels |
| Trimitra Prawara vs. Merdeka Copper Gold | Trimitra Prawara vs. Pertamina Geothermal Energy | Trimitra Prawara vs. Trinitan Metals and | Trimitra Prawara vs. Eastparc Hotel Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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