Correlation Between Merdeka Copper and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Bank Nationalnobu 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 Bank Nationalnobu 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 Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Merdeka Copper and Bank Nationalnobu 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 Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Bank Nationalnobu.
Diversification Opportunities for Merdeka Copper and Bank Nationalnobu
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merdeka and Bank is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk 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 Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Merdeka Copper and Bank Nationalnobu
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Bank Nationalnobu. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.04 times less risky than Bank Nationalnobu. The stock trades about -0.06 of its potential returns per unit of risk. The Bank Nationalnobu Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 52,000 in Bank Nationalnobu Tbk on September 3, 2024 and sell it today you would earn a total of 16,000 from holding Bank Nationalnobu Tbk or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Merdeka Copper Gold |
| Bank Nationalnobu Tbk |
Merdeka Copper and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Bank Nationalnobu
The main advantage of trading using opposite Merdeka Copper and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu'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 |
| Bank Nationalnobu vs. Lion Metal Works | Bank Nationalnobu vs. Metro Healthcare Indonesia | Bank Nationalnobu vs. Indo Acidatama Tbk | Bank Nationalnobu vs. Envy Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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