Correlation Between Lion Metal and PT Jobubu
Can any of the company-specific risk be diversified away by investing in both Lion Metal and PT Jobubu 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 Lion Metal and PT Jobubu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Metal Works and PT Jobubu Jarum, you can compare the effects of market volatilities on Lion Metal and PT Jobubu 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 Lion Metal with a short position of PT Jobubu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and PT Jobubu.
Diversification Opportunities for Lion Metal and PT Jobubu
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lion and BEER is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and PT Jobubu Jarum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Jobubu Jarum and Lion Metal 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 Lion Metal Works are associated (or correlated) with PT Jobubu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Jobubu Jarum has no effect on the direction of Lion Metal i.e., Lion Metal and PT Jobubu go up and down completely randomly.
Pair Corralation between Lion Metal and PT Jobubu
Assuming the 90 days trading horizon Lion Metal Works is expected to generate 1.08 times more return on investment than PT Jobubu. However, Lion Metal is 1.08 times more volatile than PT Jobubu Jarum. It trades about -0.08 of its potential returns per unit of risk. PT Jobubu Jarum is currently generating about -0.09 per unit of risk. If you would invest 59,856 in Lion Metal Works on September 1, 2024 and sell it today you would lose (29,056) from holding Lion Metal Works or give up 48.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. PT Jobubu Jarum
Performance |
| Timeline |
| Lion Metal Works |
| PT Jobubu Jarum |
Lion Metal and PT Jobubu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and PT Jobubu
The main advantage of trading using opposite Lion Metal and PT Jobubu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, PT Jobubu 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 PT Jobubu will offset losses from the drop in PT Jobubu's long position.| Lion Metal vs. Lionmesh Prima Tbk | Lion Metal vs. Pelangi Indah Canindo | Lion Metal vs. Indal Aluminium Industry | Lion Metal vs. Intanwijaya Internasional Tbk |
| PT Jobubu vs. PT Dewi Shri | PT Jobubu vs. PT Data Sinergitama | PT Jobubu vs. PAM Mineral Tbk | PT Jobubu vs. Autopedia Sukses Lestari |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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