Correlation Between Merdeka Copper and Transcoal Pacific
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific Tbk, you can compare the effects of market volatilities on Merdeka Copper and Transcoal Pacific 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 Transcoal Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Transcoal Pacific.
Diversification Opportunities for Merdeka Copper and Transcoal Pacific
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and Transcoal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Transcoal Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcoal Pacific 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 Transcoal Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcoal Pacific Tbk has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Transcoal Pacific go up and down completely randomly.
Pair Corralation between Merdeka Copper and Transcoal Pacific
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Transcoal Pacific. In addition to that, Merdeka Copper is 1.34 times more volatile than Transcoal Pacific Tbk. It trades about -0.06 of its total potential returns per unit of risk. Transcoal Pacific Tbk is currently generating about -0.02 per unit of volatility. If you would invest 744,063 in Transcoal Pacific Tbk on November 4, 2024 and sell it today you would lose (94,063) from holding Transcoal Pacific Tbk or give up 12.64% 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. Transcoal Pacific Tbk
Performance |
| Timeline |
| Merdeka Copper Gold |
| Transcoal Pacific Tbk |
Merdeka Copper and Transcoal Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Transcoal Pacific
The main advantage of trading using opposite Merdeka Copper and Transcoal Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Transcoal Pacific 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 Transcoal Pacific will offset losses from the drop in Transcoal Pacific'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 |
| Transcoal Pacific vs. Bank Tabungan Pensiunan | Transcoal Pacific vs. Chandra Asri Petrochemical | Transcoal Pacific vs. Mitra Keluarga Karyasehat | Transcoal Pacific 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |