Correlation Between Merdeka Copper and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Bank Mandiri 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 Mandiri 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 Mandiri Persero, you can compare the effects of market volatilities on Merdeka Copper and Bank Mandiri 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 Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Bank Mandiri.
Diversification Opportunities for Merdeka Copper and Bank Mandiri
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merdeka and Bank is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero 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 Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Bank Mandiri go up and down completely randomly.
Pair Corralation between Merdeka Copper and Bank Mandiri
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Bank Mandiri. In addition to that, Merdeka Copper is 1.05 times more volatile than Bank Mandiri Persero. It trades about -0.46 of its total potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.07 per unit of volatility. If you would invest 675,000 in Bank Mandiri Persero on August 31, 2024 and sell it today you would lose (22,500) from holding Bank Mandiri Persero or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Bank Mandiri Persero
Performance |
| Timeline |
| Merdeka Copper Gold |
| Bank Mandiri Persero |
Merdeka Copper and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Bank Mandiri
The main advantage of trading using opposite Merdeka Copper and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Bank Mandiri 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 Mandiri will offset losses from the drop in Bank Mandiri's long position.| Merdeka Copper vs. Perusahaan Gas Negara | Merdeka Copper vs. Vale Indonesia Tbk | Merdeka Copper vs. Telkom Indonesia Tbk | Merdeka Copper vs. Mitra Pinasthika Mustika |
| Bank Mandiri vs. Bank BRISyariah Tbk | Bank Mandiri vs. Ace Hardware Indonesia | Bank Mandiri vs. Merdeka Copper Gold | Bank Mandiri 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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