Correlation Between Merdeka Copper and Tempo Scan
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Tempo Scan 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 Tempo Scan 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 Tempo Scan Pacific, you can compare the effects of market volatilities on Merdeka Copper and Tempo Scan 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 Tempo Scan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Tempo Scan.
Diversification Opportunities for Merdeka Copper and Tempo Scan
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merdeka and Tempo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Tempo Scan Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Scan Pacific 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 Tempo Scan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Scan Pacific has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Tempo Scan go up and down completely randomly.
Pair Corralation between Merdeka Copper and Tempo Scan
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Tempo Scan. But the stock apears to be less risky and, when comparing its historical volatility, Merdeka Copper Gold is 1.12 times less risky than Tempo Scan. The stock trades about -0.13 of its potential returns per unit of risk. The Tempo Scan Pacific is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 191,538 in Tempo Scan Pacific on September 1, 2024 and sell it today you would earn a total of 60,462 from holding Tempo Scan Pacific or generate 31.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Tempo Scan Pacific
Performance |
| Timeline |
| Merdeka Copper Gold |
| Tempo Scan Pacific |
Merdeka Copper and Tempo Scan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Tempo Scan
The main advantage of trading using opposite Merdeka Copper and Tempo Scan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Tempo Scan 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 Tempo Scan will offset losses from the drop in Tempo Scan'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 |
| Tempo Scan vs. Total Bangun Persada | Tempo Scan vs. Tunas Baru Lampung | Tempo Scan vs. Solusi Bangun Indonesia | Tempo Scan vs. Ramayana Lestari Sentosa |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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