Correlation Between Merdeka Copper and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo, you can compare the effects of market volatilities on Merdeka Copper and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Hoffmen Cleanindo.
Diversification Opportunities for Merdeka Copper and Hoffmen Cleanindo
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Merdeka and Hoffmen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Merdeka Copper and Hoffmen Cleanindo
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Hoffmen Cleanindo. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.05 times less risky than Hoffmen Cleanindo. The stock trades about -0.49 of its potential returns per unit of risk. The Hoffmen Cleanindo is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 17,200 in Hoffmen Cleanindo on September 3, 2024 and sell it today you would lose (1,700) from holding Hoffmen Cleanindo or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Hoffmen Cleanindo
Performance |
| Timeline |
| Merdeka Copper Gold |
| Hoffmen Cleanindo |
Merdeka Copper and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Hoffmen Cleanindo
The main advantage of trading using opposite Merdeka Copper and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo'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 |
| Hoffmen Cleanindo vs. Chandra Asri Petrochemical | Hoffmen Cleanindo vs. Bank Negara Indonesia | Hoffmen Cleanindo vs. Sumber Alfaria Trijaya | Hoffmen Cleanindo 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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