Correlation Between PAM Mineral and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both PAM Mineral and Merdeka Copper 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 PAM Mineral and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Mineral Tbk and Merdeka Copper Gold, you can compare the effects of market volatilities on PAM Mineral and Merdeka Copper 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 PAM Mineral with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and Merdeka Copper.
Diversification Opportunities for PAM Mineral and Merdeka Copper
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PAM and Merdeka is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and Merdeka Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merdeka Copper Gold and PAM Mineral 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 PAM Mineral Tbk are associated (or correlated) with Merdeka Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merdeka Copper Gold has no effect on the direction of PAM Mineral i.e., PAM Mineral and Merdeka Copper go up and down completely randomly.
Pair Corralation between PAM Mineral and Merdeka Copper
Assuming the 90 days trading horizon PAM Mineral Tbk is expected to generate 1.31 times more return on investment than Merdeka Copper. However, PAM Mineral is 1.31 times more volatile than Merdeka Copper Gold. It trades about 0.2 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.38 per unit of risk. If you would invest 27,200 in PAM Mineral Tbk on August 29, 2024 and sell it today you would earn a total of 3,400 from holding PAM Mineral Tbk or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAM Mineral Tbk vs. Merdeka Copper Gold
Performance |
| Timeline |
| PAM Mineral Tbk |
| Merdeka Copper Gold |
PAM Mineral and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Mineral and Merdeka Copper
The main advantage of trading using opposite PAM Mineral and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, Merdeka Copper 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 Merdeka Copper will offset losses from the drop in Merdeka Copper's long position.| PAM Mineral vs. Archi Indonesia Tbk | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Bank Panin Syariah | PAM Mineral vs. Central Omega Resources |
| Merdeka Copper vs. PT Sarana Menara | Merdeka Copper vs. Tower Bersama Infrastructure | Merdeka Copper vs. Pabrik Kertas Tjiwi | Merdeka Copper vs. Mitra Keluarga Karyasehat |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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