Correlation Between J Resources and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both J Resources 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 J Resources and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Resources Asia and Merdeka Copper Gold, you can compare the effects of market volatilities on J Resources 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 J Resources with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Merdeka Copper.
Diversification Opportunities for J Resources and Merdeka Copper
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between PSAB and Merdeka is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia 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 J Resources 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 J Resources Asia 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 J Resources i.e., J Resources and Merdeka Copper go up and down completely randomly.
Pair Corralation between J Resources and Merdeka Copper
Assuming the 90 days trading horizon J Resources Asia is expected to generate 1.58 times more return on investment than Merdeka Copper. However, J Resources is 1.58 times more volatile than Merdeka Copper Gold. It trades about -0.04 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.34 per unit of risk. If you would invest 31,200 in J Resources Asia on August 30, 2024 and sell it today you would lose (1,200) from holding J Resources Asia or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Merdeka Copper Gold
Performance |
| Timeline |
| J Resources Asia |
| Merdeka Copper Gold |
J Resources and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Merdeka Copper
The main advantage of trading using opposite J Resources and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources 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.| J Resources vs. Merdeka Copper Gold | J Resources vs. Golden Eagle Energy | J Resources vs. Rukun Raharja Tbk | J Resources vs. Wilton Makmur Indonesia |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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