Correlation Between Merdeka Copper and Verena Multi
Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Verena Multi 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 Verena Multi 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 Verena Multi Finance, you can compare the effects of market volatilities on Merdeka Copper and Verena Multi 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 Verena Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Verena Multi.
Diversification Opportunities for Merdeka Copper and Verena Multi
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merdeka and Verena is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Verena Multi Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verena Multi Finance 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 Verena Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verena Multi Finance has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Verena Multi go up and down completely randomly.
Pair Corralation between Merdeka Copper and Verena Multi
Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Verena Multi. In addition to that, Merdeka Copper is 1.35 times more volatile than Verena Multi Finance. It trades about -0.46 of its total potential returns per unit of risk. Verena Multi Finance is currently generating about -0.12 per unit of volatility. If you would invest 9,200 in Verena Multi Finance on August 31, 2024 and sell it today you would lose (400.00) from holding Verena Multi Finance or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merdeka Copper Gold vs. Verena Multi Finance
Performance |
| Timeline |
| Merdeka Copper Gold |
| Verena Multi Finance |
Merdeka Copper and Verena Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merdeka Copper and Verena Multi
The main advantage of trading using opposite Merdeka Copper and Verena Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Verena Multi 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 Verena Multi will offset losses from the drop in Verena Multi's long position.| Merdeka Copper vs. Perusahaan Gas Negara | Merdeka Copper vs. Vale Indonesia Tbk | Merdeka Copper vs. Telkom Indonesia Tbk | Merdeka Copper vs. Mitra Pinasthika Mustika |
| Verena Multi vs. Bank BRISyariah Tbk | Verena Multi vs. Ace Hardware Indonesia | Verena Multi vs. Merdeka Copper Gold | Verena Multi vs. Mitra Pinasthika Mustika |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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