Correlation Between Kedawung Setia and Lion Metal
Can any of the company-specific risk be diversified away by investing in both Kedawung Setia 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 Kedawung Setia and Lion Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedawung Setia Industrial and Lion Metal Works, you can compare the effects of market volatilities on Kedawung Setia 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 Kedawung Setia with a short position of Lion Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedawung Setia and Lion Metal.
Diversification Opportunities for Kedawung Setia and Lion Metal
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kedawung and Lion is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kedawung Setia Industrial 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 Kedawung Setia 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 Kedawung Setia Industrial 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 Kedawung Setia i.e., Kedawung Setia and Lion Metal go up and down completely randomly.
Pair Corralation between Kedawung Setia and Lion Metal
Assuming the 90 days trading horizon Kedawung Setia Industrial is expected to generate 0.78 times more return on investment than Lion Metal. However, Kedawung Setia Industrial is 1.29 times less risky than Lion Metal. It trades about 0.08 of its potential returns per unit of risk. Lion Metal Works is currently generating about -0.03 per unit of risk. If you would invest 21,457 in Kedawung Setia Industrial on August 28, 2024 and sell it today you would earn a total of 22,543 from holding Kedawung Setia Industrial or generate 105.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Kedawung Setia Industrial vs. Lion Metal Works
Performance |
| Timeline |
| Kedawung Setia Industrial |
| Lion Metal Works |
Kedawung Setia and Lion Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedawung Setia and Lion Metal
The main advantage of trading using opposite Kedawung Setia and Lion Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedawung Setia 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.| Kedawung Setia vs. Kedaung Indah Can | Kedawung Setia vs. Langgeng Makmur Industri | Kedawung Setia vs. Kabelindo Murni Tbk | Kedawung Setia vs. Mustika Ratu 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |