Correlation Between Merdeka Copper and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Merdeka Copper and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and PT Sarana.
Diversification Opportunities for Merdeka Copper and PT Sarana
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merdeka and TOWR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and PT Sarana go up and down completely randomly.
Pair Corralation between Merdeka Copper and PT Sarana
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the PT Sarana. In addition to that, Merdeka Copper is 1.84 times more volatile than PT Sarana Menara. It trades about -0.4 of its total potential returns per unit of risk. PT Sarana Menara is currently generating about -0.39 per unit of volatility. If you would invest 80,500 in PT Sarana Menara on August 25, 2024 and sell it today you would lose (8,500) from holding PT Sarana Menara or give up 10.56% 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. PT Sarana Menara
Performance |
| Timeline |
| Merdeka Copper Gold |
| PT Sarana Menara |
Merdeka Copper and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and PT Sarana
The main advantage of trading using opposite Merdeka Copper and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Merdeka Copper vs. Kedaung Indah Can | Merdeka Copper vs. Langgeng Makmur Industri | Merdeka Copper vs. Kabelindo Murni Tbk | Merdeka Copper vs. Mustika Ratu Tbk |
| PT Sarana vs. Tower Bersama Infrastructure | PT Sarana vs. Merdeka Copper Gold | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Japfa Comfeed 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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