Correlation Between Merdeka Copper and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Elang Mahkota 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 Elang Mahkota 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 Elang Mahkota Teknologi, you can compare the effects of market volatilities on Merdeka Copper and Elang Mahkota 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 Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Elang Mahkota.
Diversification Opportunities for Merdeka Copper and Elang Mahkota
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merdeka and Elang is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi 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 Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Elang Mahkota go up and down completely randomly.
Pair Corralation between Merdeka Copper and Elang Mahkota
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Elang Mahkota. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.36 times less risky than Elang Mahkota. The stock trades about -0.4 of its potential returns per unit of risk. The Elang Mahkota Teknologi is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 51,000 in Elang Mahkota Teknologi on August 25, 2024 and sell it today you would lose (2,600) from holding Elang Mahkota Teknologi or give up 5.1% 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. Elang Mahkota Teknologi
Performance |
| Timeline |
| Merdeka Copper Gold |
| Elang Mahkota Teknologi |
Merdeka Copper and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Elang Mahkota
The main advantage of trading using opposite Merdeka Copper and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Elang Mahkota 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 Elang Mahkota will offset losses from the drop in Elang Mahkota's long position.| Merdeka Copper vs. Kedaung Indah Can | Merdeka Copper vs. Langgeng Makmur Industri | Merdeka Copper vs. Kabelindo Murni Tbk | Merdeka Copper vs. Mustika Ratu Tbk |
| Elang Mahkota vs. Mnc Land Tbk | Elang Mahkota vs. MNC Vision Networks | Elang Mahkota vs. MD Pictures Tbk | Elang Mahkota vs. Link Net Tbk |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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