Correlation Between Wilton Makmur and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Wilton Makmur 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 Wilton Makmur and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilton Makmur Indonesia and Merdeka Copper Gold, you can compare the effects of market volatilities on Wilton Makmur 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 Wilton Makmur with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilton Makmur and Merdeka Copper.
Diversification Opportunities for Wilton Makmur and Merdeka Copper
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wilton and Merdeka is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wilton Makmur Indonesia 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 Wilton Makmur 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 Wilton Makmur Indonesia 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 Wilton Makmur i.e., Wilton Makmur and Merdeka Copper go up and down completely randomly.
Pair Corralation between Wilton Makmur and Merdeka Copper
Assuming the 90 days trading horizon Wilton Makmur Indonesia is expected to generate 2.16 times more return on investment than Merdeka Copper. However, Wilton Makmur is 2.16 times more volatile than Merdeka Copper Gold. It trades about 0.09 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.17 per unit of risk. If you would invest 3,500 in Wilton Makmur Indonesia on August 26, 2024 and sell it today you would earn a total of 500.00 from holding Wilton Makmur Indonesia or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilton Makmur Indonesia vs. Merdeka Copper Gold
Performance |
| Timeline |
| Wilton Makmur Indonesia |
| Merdeka Copper Gold |
Wilton Makmur and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilton Makmur and Merdeka Copper
The main advantage of trading using opposite Wilton Makmur and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilton Makmur 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.| Wilton Makmur vs. Petrosea Tbk | Wilton Makmur vs. Harum Energy Tbk | Wilton Makmur vs. Perdana Karya Perkasa | Wilton Makmur vs. Samindo Resources Tbk |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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