Correlation Between Merdeka Copper and J Resources
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and J Resources 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 J Resources 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 J Resources Asia, you can compare the effects of market volatilities on Merdeka Copper and J Resources 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 J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and J Resources.
Diversification Opportunities for Merdeka Copper and J Resources
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merdeka and PSAB is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia 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 J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and J Resources go up and down completely randomly.
Pair Corralation between Merdeka Copper and J Resources
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to generate 1.56 times more return on investment than J Resources. However, Merdeka Copper is 1.56 times more volatile than J Resources Asia. It trades about 0.0 of its potential returns per unit of risk. J Resources Asia is currently generating about -0.13 per unit of risk. If you would invest 159,500 in Merdeka Copper Gold on November 3, 2024 and sell it today you would lose (3,000) from holding Merdeka Copper Gold or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. J Resources Asia
Performance |
| Timeline |
| Merdeka Copper Gold |
| J Resources Asia |
Merdeka Copper and J Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and J Resources
The main advantage of trading using opposite Merdeka Copper and J Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, J Resources 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 J Resources will offset losses from the drop in J Resources' 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 |
| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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