Correlation Between Merdeka Copper and PT Wahana
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and PT Wahana 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 PT Wahana 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 PT Wahana Interfood, you can compare the effects of market volatilities on Merdeka Copper and PT Wahana 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 PT Wahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and PT Wahana.
Diversification Opportunities for Merdeka Copper and PT Wahana
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and COCO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and PT Wahana Interfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wahana Interfood 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 PT Wahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wahana Interfood has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and PT Wahana go up and down completely randomly.
Pair Corralation between Merdeka Copper and PT Wahana
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to generate 0.59 times more return on investment than PT Wahana. However, Merdeka Copper Gold is 1.69 times less risky than PT Wahana. It trades about -0.03 of its potential returns per unit of risk. PT Wahana Interfood is currently generating about -0.04 per unit of risk. If you would invest 247,000 in Merdeka Copper Gold on September 3, 2024 and sell it today you would lose (62,000) from holding Merdeka Copper Gold or give up 25.1% 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. PT Wahana Interfood
Performance |
| Timeline |
| Merdeka Copper Gold |
| PT Wahana Interfood |
Merdeka Copper and PT Wahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and PT Wahana
The main advantage of trading using opposite Merdeka Copper and PT Wahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, PT Wahana 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 PT Wahana will offset losses from the drop in PT Wahana'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 |
| PT Wahana vs. Garudafood Putra Putri | PT Wahana vs. Sentra Food Indonesia | PT Wahana vs. Campina Ice Cream | PT Wahana vs. Diamond Food 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |