Correlation Between Merdeka Copper and Bank Bumi
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Bank Bumi 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 Bumi 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 Bumi Arta, you can compare the effects of market volatilities on Merdeka Copper and Bank Bumi 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 Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Bank Bumi.
Diversification Opportunities for Merdeka Copper and Bank Bumi
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merdeka and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Bank Bumi Arta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Bumi Arta 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 Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Bumi Arta has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Bank Bumi go up and down completely randomly.
Pair Corralation between Merdeka Copper and Bank Bumi
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Bank Bumi. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.11 times less risky than Bank Bumi. The stock trades about -0.17 of its potential returns per unit of risk. The Bank Bumi Arta is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 79,000 in Bank Bumi Arta on September 2, 2024 and sell it today you would lose (11,000) from holding Bank Bumi Arta or give up 13.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Bank Bumi Arta
Performance |
| Timeline |
| Merdeka Copper Gold |
| Bank Bumi Arta |
Merdeka Copper and Bank Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Bank Bumi
The main advantage of trading using opposite Merdeka Copper and Bank Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Bank Bumi 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 Bumi will offset losses from the drop in Bank Bumi's long position.| Merdeka Copper vs. Perusahaan Gas Negara | Merdeka Copper vs. Telkom Indonesia Tbk | Merdeka Copper vs. Mitra Pinasthika Mustika | Merdeka Copper vs. Jakarta Int Hotels |
| Bank Bumi vs. Bank Capital Indonesia | Bank Bumi vs. Bank Mnc Internasional | Bank Bumi vs. Bank Victoria International | Bank Bumi vs. Bank Qnb Indonesia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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