Correlation Between Merdeka Copper and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Communication Cable 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 Communication Cable 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 Communication Cable Systems, you can compare the effects of market volatilities on Merdeka Copper and Communication Cable 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 Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Communication Cable.
Diversification Opportunities for Merdeka Copper and Communication Cable
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merdeka and Communication is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable 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 Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Communication Cable go up and down completely randomly.
Pair Corralation between Merdeka Copper and Communication Cable
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Communication Cable. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.88 times less risky than Communication Cable. The stock trades about -0.17 of its potential returns per unit of risk. The Communication Cable Systems is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 29,600 in Communication Cable Systems on September 3, 2024 and sell it today you would lose (4,000) from holding Communication Cable Systems or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Communication Cable Systems
Performance |
| Timeline |
| Merdeka Copper Gold |
| Communication Cable |
Merdeka Copper and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Communication Cable
The main advantage of trading using opposite Merdeka Copper and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable'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 |
| Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan | Communication Cable 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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