Correlation Between Merdeka Copper and Bank Tabungan
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Bank Tabungan 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 Bank Tabungan 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 Bank Tabungan Negara, you can compare the effects of market volatilities on Merdeka Copper and Bank Tabungan 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 Bank Tabungan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Bank Tabungan.
Diversification Opportunities for Merdeka Copper and Bank Tabungan
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and Bank is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Bank Tabungan Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Negara 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 Bank Tabungan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Tabungan Negara has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Bank Tabungan go up and down completely randomly.
Pair Corralation between Merdeka Copper and Bank Tabungan
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Bank Tabungan. In addition to that, Merdeka Copper is 1.42 times more volatile than Bank Tabungan Negara. It trades about -0.56 of its total potential returns per unit of risk. Bank Tabungan Negara is currently generating about -0.26 per unit of volatility. If you would invest 140,500 in Bank Tabungan Negara on September 1, 2024 and sell it today you would lose (12,000) from holding Bank Tabungan Negara or give up 8.54% 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. Bank Tabungan Negara
Performance |
| Timeline |
| Merdeka Copper Gold |
| Bank Tabungan Negara |
Merdeka Copper and Bank Tabungan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Bank Tabungan
The main advantage of trading using opposite Merdeka Copper and Bank Tabungan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Bank Tabungan 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 Bank Tabungan will offset losses from the drop in Bank Tabungan'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 |
| Bank Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan vs. Mitra Pinasthika Mustika |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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