Correlation Between Japfa Comfeed and Merdeka Copper
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed 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 Japfa Comfeed and Merdeka Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japfa Comfeed Indonesia and Merdeka Copper Gold, you can compare the effects of market volatilities on Japfa Comfeed 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 Japfa Comfeed with a short position of Merdeka Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Merdeka Copper.
Diversification Opportunities for Japfa Comfeed and Merdeka Copper
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japfa and Merdeka is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed 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 Japfa Comfeed 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 Japfa Comfeed 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 Japfa Comfeed i.e., Japfa Comfeed and Merdeka Copper go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Merdeka Copper
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 0.56 times more return on investment than Merdeka Copper. However, Japfa Comfeed Indonesia is 1.79 times less risky than Merdeka Copper. It trades about 0.08 of its potential returns per unit of risk. Merdeka Copper Gold is currently generating about -0.08 per unit of risk. If you would invest 171,000 in Japfa Comfeed Indonesia on December 1, 2024 and sell it today you would earn a total of 16,000 from holding Japfa Comfeed Indonesia or generate 9.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Japfa Comfeed Indonesia vs. Merdeka Copper Gold
Performance |
Timeline |
Japfa Comfeed Indonesia |
Merdeka Copper Gold |
Japfa Comfeed and Merdeka Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Japfa Comfeed and Merdeka Copper
The main advantage of trading using opposite Japfa Comfeed and Merdeka Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed 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.Japfa Comfeed vs. Charoen Pokphand Indonesia | Japfa Comfeed vs. Kalbe Farma Tbk | Japfa Comfeed vs. Indofood Cbp Sukses | Japfa Comfeed vs. PT Indofood Sukses |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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