Correlation Between Lion Metal and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Lion Metal 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 Lion Metal and Inocycle Technology 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 Inocycle Technology Tbk, you can compare the effects of market volatilities on Lion Metal 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 Lion Metal with a short position of Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Inocycle Technology.
Diversification Opportunities for Lion Metal and Inocycle Technology
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Inocycle is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works 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 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 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 Lion Metal i.e., Lion Metal and Inocycle Technology go up and down completely randomly.
Pair Corralation between Lion Metal and Inocycle Technology
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Inocycle Technology. In addition to that, Lion Metal is 4.38 times more volatile than Inocycle Technology Tbk. It trades about -0.29 of its total potential returns per unit of risk. Inocycle Technology Tbk is currently generating about -0.1 per unit of volatility. If you would invest 9,000 in Inocycle Technology Tbk on November 28, 2024 and sell it today you would lose (400.00) from holding Inocycle Technology Tbk or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Inocycle Technology Tbk |
Lion Metal and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Inocycle Technology
The main advantage of trading using opposite Lion Metal and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal 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.| Lion Metal vs. Lionmesh Prima Tbk | Lion Metal vs. Pelangi Indah Canindo | Lion Metal vs. Indal Aluminium Industry | Lion Metal vs. Intanwijaya Internasional 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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