Correlation Between Diagnos Laboratorium and Lionmesh Prima
Can any of the company-specific risk be diversified away by investing in both Diagnos Laboratorium and Lionmesh Prima 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 Diagnos Laboratorium and Lionmesh Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diagnos Laboratorium Utama and Lionmesh Prima Tbk, you can compare the effects of market volatilities on Diagnos Laboratorium and Lionmesh Prima 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 Diagnos Laboratorium with a short position of Lionmesh Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diagnos Laboratorium and Lionmesh Prima.
Diversification Opportunities for Diagnos Laboratorium and Lionmesh Prima
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diagnos and Lionmesh is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Diagnos Laboratorium Utama and Lionmesh Prima Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionmesh Prima Tbk and Diagnos Laboratorium 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 Diagnos Laboratorium Utama are associated (or correlated) with Lionmesh Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionmesh Prima Tbk has no effect on the direction of Diagnos Laboratorium i.e., Diagnos Laboratorium and Lionmesh Prima go up and down completely randomly.
Pair Corralation between Diagnos Laboratorium and Lionmesh Prima
Assuming the 90 days trading horizon Diagnos Laboratorium Utama is expected to generate 1.61 times more return on investment than Lionmesh Prima. However, Diagnos Laboratorium is 1.61 times more volatile than Lionmesh Prima Tbk. It trades about 0.01 of its potential returns per unit of risk. Lionmesh Prima Tbk is currently generating about -0.03 per unit of risk. If you would invest 23,200 in Diagnos Laboratorium Utama on September 3, 2024 and sell it today you would lose (1,200) from holding Diagnos Laboratorium Utama or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Diagnos Laboratorium Utama vs. Lionmesh Prima Tbk
Performance |
| Timeline |
| Diagnos Laboratorium |
| Lionmesh Prima Tbk |
Diagnos Laboratorium and Lionmesh Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diagnos Laboratorium and Lionmesh Prima
The main advantage of trading using opposite Diagnos Laboratorium and Lionmesh Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diagnos Laboratorium position performs unexpectedly, Lionmesh Prima 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 Lionmesh Prima will offset losses from the drop in Lionmesh Prima's long position.| Diagnos Laboratorium vs. Prodia Widyahusada Tbk | Diagnos Laboratorium vs. Medikaloka Hermina PT | Diagnos Laboratorium vs. Itama Ranoraya | Diagnos Laboratorium vs. Digital Mediatama Maxima |
| Lionmesh Prima vs. Lion Metal Works | Lionmesh Prima vs. Pelangi Indah Canindo | Lionmesh Prima vs. Indal Aluminium Industry | Lionmesh Prima vs. Tembaga Mulia Semanan |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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