Correlation Between Tower Bersama and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Tower Bersama 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 Tower Bersama and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Bersama Infrastructure and Merdeka Copper Gold, you can compare the effects of market volatilities on Tower Bersama 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 Tower Bersama with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Bersama and Merdeka Copper.
Diversification Opportunities for Tower Bersama and Merdeka Copper
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tower and Merdeka is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tower Bersama Infrastructure 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 Tower Bersama 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 Tower Bersama Infrastructure 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 Tower Bersama i.e., Tower Bersama and Merdeka Copper go up and down completely randomly.
Pair Corralation between Tower Bersama and Merdeka Copper
Assuming the 90 days trading horizon Tower Bersama Infrastructure is expected to generate 0.61 times more return on investment than Merdeka Copper. However, Tower Bersama Infrastructure is 1.64 times less risky than Merdeka Copper. It trades about 0.19 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about 0.02 per unit of risk. If you would invest 191,000 in Tower Bersama Infrastructure on October 22, 2024 and sell it today you would earn a total of 16,000 from holding Tower Bersama Infrastructure or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Bersama Infrastructure vs. Merdeka Copper Gold
Performance |
| Timeline |
| Tower Bersama Infras |
| Merdeka Copper Gold |
Tower Bersama and Merdeka Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Bersama and Merdeka Copper
The main advantage of trading using opposite Tower Bersama and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Bersama 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.| Tower Bersama vs. PT Sarana Menara | Tower Bersama vs. XL Axiata Tbk | Tower Bersama vs. Merdeka Copper Gold | Tower Bersama vs. Surya Citra Media |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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