Correlation Between Merdeka Copper and Cipta Selera

Can any of the company-specific risk be diversified away by investing in both Merdeka Copper and Cipta Selera 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 Cipta Selera 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 Cipta Selera Murni, you can compare the effects of market volatilities on Merdeka Copper and Cipta Selera 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 Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merdeka Copper and Cipta Selera.

Diversification Opportunities for Merdeka Copper and Cipta Selera

-0.01

Correlation Coefficient

Merdeka Copper  Cipta Selera

Good diversification

The 3 months correlation between Merdeka and Cipta is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Merdeka Copper Gold and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni 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 Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Merdeka Copper i.e., Merdeka Copper and Cipta Selera go up and down completely randomly.

Pair Corralation between Merdeka Copper and Cipta Selera

Assuming the 90 days trading horizon Merdeka Copper is expected to generate 2.1 times less return on investment than Cipta Selera. In addition to that, Merdeka Copper is 1.74 times more volatile than Cipta Selera Murni. It trades about 0.04 of its total potential returns per unit of risk. Cipta Selera Murni is currently generating about 0.15 per unit of volatility. If you would invest  302,000  in Cipta Selera Murni on October 26, 2024 and sell it today you would earn a total of  21,000  from holding Cipta Selera Murni or generate 6.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Merdeka Copper Gold  vs.  Cipta Selera Murni

Merdeka Copper Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merdeka Copper Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Cipta Selera Murni

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cipta Selera Murni are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cipta Selera disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Merdeka Copper and Cipta Selera

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

The idea behind Merdeka Copper Gold and Cipta Selera Murni 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.