Correlation Between Merdeka Copper and Asuransi Dayin

Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Asuransi Dayin 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 Merdeka Copper and Asuransi Dayin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Merdeka Copper Gold and Asuransi Dayin Mitra, you can compare the effects of market volatilities on Merdeka Copper and Asuransi Dayin 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 Merdeka Copper with a short position of Asuransi Dayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Asuransi Dayin.

Diversification Opportunities for Merdeka Copper and Asuransi Dayin

-0.69

Correlation Coefficient

Merdeka Copper  Asuransi Dayin

Excellent diversification

The 3 months correlation between Merdeka and Asuransi is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra and Merdeka Copper 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 Merdeka Copper Gold are associated (or correlated) with Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Asuransi Dayin go up and down completely randomly.

Pair Corralation between Merdeka Copper and Asuransi Dayin

Assuming the 90 days trading horizon Merdeka Copper Gold is expected to under-perform the Asuransi Dayin. In addition to that, Merdeka Copper is 1.18 times more volatile than Asuransi Dayin Mitra. It trades about -0.14 of its total potential returns per unit of risk. Asuransi Dayin Mitra is currently generating about -0.09 per unit of volatility. If you would invest  48,600  in Asuransi Dayin Mitra on February 10, 2024 and sell it today you would lose (1,600) from holding Asuransi Dayin Mitra or give up 3.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Merdeka Copper Gold  vs.  Asuransi Dayin Mitra

Merdeka Copper Gold

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Merdeka Copper Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Merdeka Copper disclosed solid returns over the last few months and may actually be approaching a breakup point.

Asuransi Dayin Mitra

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Dayin Mitra are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Asuransi Dayin is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Merdeka Copper and Asuransi Dayin

The main advantage of trading using opposite Merdeka Copper and Asuransi Dayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merdeka Copper position performs unexpectedly, Asuransi Dayin 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 Asuransi Dayin will offset losses from the drop in Asuransi Dayin's long position.

The idea behind Merdeka Copper Gold and Asuransi Dayin Mitra pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.