Correlation Between Perusahaan Gas and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas 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 Perusahaan Gas and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Merdeka Copper Gold, you can compare the effects of market volatilities on Perusahaan Gas 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 Perusahaan Gas with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Merdeka Copper.
Diversification Opportunities for Perusahaan Gas and Merdeka Copper
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perusahaan and Merdeka is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara 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 Perusahaan Gas 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 Perusahaan Gas Negara 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 Perusahaan Gas i.e., Perusahaan Gas and Merdeka Copper go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Merdeka Copper
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 0.95 times more return on investment than Merdeka Copper. However, Perusahaan Gas Negara is 1.06 times less risky than Merdeka Copper. It trades about 0.06 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.46 per unit of risk. If you would invest 150,500 in Perusahaan Gas Negara on August 31, 2024 and sell it today you would earn a total of 3,500 from holding Perusahaan Gas Negara or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Merdeka Copper Gold
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Merdeka Copper Gold |
Perusahaan Gas and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Merdeka Copper
The main advantage of trading using opposite Perusahaan Gas and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas 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.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| Merdeka Copper vs. Perusahaan Gas Negara | Merdeka Copper vs. Vale Indonesia Tbk | Merdeka Copper vs. Telkom Indonesia Tbk | Merdeka Copper 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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