Correlation Between Merdeka Copper and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Timah Persero 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 Timah Persero 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 Timah Persero Tbk, you can compare the effects of market volatilities on Merdeka Copper and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Timah Persero.
Diversification Opportunities for Merdeka Copper and Timah Persero
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Merdeka and Timah is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Timah Persero go up and down completely randomly.
Pair Corralation between Merdeka Copper and Timah Persero
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Timah Persero. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.09 times less risky than Timah Persero. The stock trades about -0.05 of its potential returns per unit of risk. The Timah Persero Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 119,002 in Timah Persero Tbk on August 26, 2024 and sell it today you would earn a total of 2,498 from holding Timah Persero Tbk or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Timah Persero Tbk
Performance |
| Timeline |
| Merdeka Copper Gold |
| Timah Persero Tbk |
Merdeka Copper and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Timah Persero
The main advantage of trading using opposite Merdeka Copper and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero'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 |
| Timah Persero vs. Kedaung Indah Can | Timah Persero vs. Langgeng Makmur Industri | Timah Persero vs. Kabelindo Murni Tbk | Timah Persero vs. Mustika Ratu Tbk |
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 Correlations module to find global opportunities by holding instruments from different markets.
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