Correlation Between Intanwijaya Internasional and Lion Metal
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Lion Metal 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 Intanwijaya Internasional and Lion Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intanwijaya Internasional Tbk and Lion Metal Works, you can compare the effects of market volatilities on Intanwijaya Internasional and Lion Metal 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 Intanwijaya Internasional with a short position of Lion Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Lion Metal.
Diversification Opportunities for Intanwijaya Internasional and Lion Metal
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intanwijaya and Lion is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Lion Metal Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Metal Works and Intanwijaya Internasional 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 Intanwijaya Internasional Tbk are associated (or correlated) with Lion Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Metal Works has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Lion Metal go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Lion Metal
Assuming the 90 days trading horizon Intanwijaya Internasional Tbk is expected to generate 0.68 times more return on investment than Lion Metal. However, Intanwijaya Internasional Tbk is 1.46 times less risky than Lion Metal. It trades about 0.03 of its potential returns per unit of risk. Lion Metal Works is currently generating about -0.12 per unit of risk. If you would invest 52,367 in Intanwijaya Internasional Tbk on August 27, 2024 and sell it today you would earn a total of 5,133 from holding Intanwijaya Internasional Tbk or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Lion Metal Works
Performance |
| Timeline |
| Intanwijaya Internasional |
| Lion Metal Works |
Intanwijaya Internasional and Lion Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Lion Metal
The main advantage of trading using opposite Intanwijaya Internasional and Lion Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Lion Metal 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 Lion Metal will offset losses from the drop in Lion Metal's long position.| Intanwijaya Internasional vs. Kedaung Indah Can | Intanwijaya Internasional vs. Langgeng Makmur Industri | Intanwijaya Internasional vs. Kabelindo Murni Tbk | Intanwijaya Internasional vs. Mustika Ratu Tbk |
| Lion Metal vs. Lionmesh Prima Tbk | Lion Metal vs. Pelangi Indah Canindo | Lion Metal vs. Indal Aluminium Industry | Lion Metal vs. Intanwijaya Internasional Tbk |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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