Correlation Between Lion Metal and Hero Supermarket
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Hero Supermarket 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 Hero Supermarket 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 Hero Supermarket Tbk, you can compare the effects of market volatilities on Lion Metal and Hero Supermarket 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 Hero Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Hero Supermarket.
Diversification Opportunities for Lion Metal and Hero Supermarket
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lion and Hero is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Hero Supermarket Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hero Supermarket Tbk 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 Hero Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hero Supermarket Tbk has no effect on the direction of Lion Metal i.e., Lion Metal and Hero Supermarket go up and down completely randomly.
Pair Corralation between Lion Metal and Hero Supermarket
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Hero Supermarket. In addition to that, Lion Metal is 2.5 times more volatile than Hero Supermarket Tbk. It trades about -0.17 of its total potential returns per unit of risk. Hero Supermarket Tbk is currently generating about -0.31 per unit of volatility. If you would invest 65,500 in Hero Supermarket Tbk on August 30, 2024 and sell it today you would lose (8,500) from holding Hero Supermarket Tbk or give up 12.98% 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. Hero Supermarket Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Hero Supermarket Tbk |
Lion Metal and Hero Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Hero Supermarket
The main advantage of trading using opposite Lion Metal and Hero Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Hero Supermarket 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 Hero Supermarket will offset losses from the drop in Hero Supermarket'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 |
| Hero Supermarket vs. Fast Food Indonesia | Hero Supermarket vs. Enseval Putra Megatrading | Hero Supermarket vs. Matahari Putra Prima | Hero Supermarket vs. Hexindo Adiperkasa 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |