Correlation Between Leyand International and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Leyand International and Inocycle Technology 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 Leyand International and Inocycle Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leyand International Tbk and Inocycle Technology Tbk, you can compare the effects of market volatilities on Leyand International and Inocycle Technology 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 Leyand International with a short position of Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyand International and Inocycle Technology.
Diversification Opportunities for Leyand International and Inocycle Technology
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leyand and Inocycle is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Leyand International Tbk and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology Tbk and Leyand International 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 Leyand International Tbk are associated (or correlated) with Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Leyand International i.e., Leyand International and Inocycle Technology go up and down completely randomly.
Pair Corralation between Leyand International and Inocycle Technology
Assuming the 90 days trading horizon Leyand International Tbk is expected to generate 3.7 times more return on investment than Inocycle Technology. However, Leyand International is 3.7 times more volatile than Inocycle Technology Tbk. It trades about -0.01 of its potential returns per unit of risk. Inocycle Technology Tbk is currently generating about -0.12 per unit of risk. If you would invest 2,000 in Leyand International Tbk on October 23, 2024 and sell it today you would lose (100.00) from holding Leyand International Tbk or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leyand International Tbk vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Leyand International Tbk |
| Inocycle Technology Tbk |
Leyand International and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyand International and Inocycle Technology
The main advantage of trading using opposite Leyand International and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyand International position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology's long position.| Leyand International vs. Intermedia Capital Tbk | Leyand International vs. Panin Financial Tbk | Leyand International vs. Surya Citra Media | Leyand International vs. Victoria Insurance Tbk |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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