Correlation Between Merdeka Copper and Surya Esa
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Surya Esa 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 Surya Esa 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 Surya Esa Perkasa, you can compare the effects of market volatilities on Merdeka Copper and Surya Esa 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 Surya Esa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Surya Esa.
Diversification Opportunities for Merdeka Copper and Surya Esa
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and Surya is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Surya Esa Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Esa Perkasa 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 Surya Esa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Esa Perkasa has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Surya Esa go up and down completely randomly.
Pair Corralation between Merdeka Copper and Surya Esa
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Surya Esa. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.31 times less risky than Surya Esa. The stock trades about -0.13 of its potential returns per unit of risk. The Surya Esa Perkasa is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 86,500 in Surya Esa Perkasa on August 29, 2024 and sell it today you would lose (3,000) from holding Surya Esa Perkasa or give up 3.47% 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. Surya Esa Perkasa
Performance |
| Timeline |
| Merdeka Copper Gold |
| Surya Esa Perkasa |
Merdeka Copper and Surya Esa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Surya Esa
The main advantage of trading using opposite Merdeka Copper and Surya Esa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Surya Esa 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 Surya Esa will offset losses from the drop in Surya Esa's long position.| Merdeka Copper vs. PT Sarana Menara | Merdeka Copper vs. Tower Bersama Infrastructure | Merdeka Copper vs. Pabrik Kertas Tjiwi | Merdeka Copper vs. Mitra Keluarga Karyasehat |
| Surya Esa vs. Harum Energy Tbk | Surya Esa vs. Delta Dunia Makmur | Surya Esa vs. Adi Sarana Armada | Surya Esa vs. Elang Mahkota Teknologi |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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