Correlation Between Merdeka Copper and Saratoga Investama
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Saratoga Investama 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 Saratoga Investama 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 Saratoga Investama Sedaya, you can compare the effects of market volatilities on Merdeka Copper and Saratoga Investama 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 Saratoga Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Saratoga Investama.
Diversification Opportunities for Merdeka Copper and Saratoga Investama
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and Saratoga is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Saratoga Investama Sedaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investama Sedaya 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 Saratoga Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investama Sedaya has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Saratoga Investama go up and down completely randomly.
Pair Corralation between Merdeka Copper and Saratoga Investama
Assuming the 90 days trading horizon Merdeka Copper is expected to generate 1.78 times less return on investment than Saratoga Investama. In addition to that, Merdeka Copper is 1.98 times more volatile than Saratoga Investama Sedaya. It trades about 0.03 of its total potential returns per unit of risk. Saratoga Investama Sedaya is currently generating about 0.12 per unit of volatility. If you would invest 184,000 in Saratoga Investama Sedaya on November 5, 2024 and sell it today you would earn a total of 8,000 from holding Saratoga Investama Sedaya or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Saratoga Investama Sedaya
Performance |
| Timeline |
| Merdeka Copper Gold |
| Saratoga Investama Sedaya |
Merdeka Copper and Saratoga Investama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Saratoga Investama
The main advantage of trading using opposite Merdeka Copper and Saratoga Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Saratoga Investama 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 Saratoga Investama will offset losses from the drop in Saratoga Investama's long position.| Merdeka Copper vs. Asiaplast Industries Tbk | Merdeka Copper vs. Alumindo Light Metal | Merdeka Copper vs. Berlina Tbk | Merdeka Copper vs. Anugerah Kagum Karya |
| Saratoga Investama vs. Elang Mahkota Teknologi | Saratoga Investama vs. Mitra Pinasthika Mustika | Saratoga Investama vs. Tower Bersama Infrastructure | Saratoga Investama vs. Merdeka Copper Gold |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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