Correlation Between Lion Metal and PT Homeco
Can any of the company-specific risk be diversified away by investing in both Lion Metal and PT Homeco 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 Homeco 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 Homeco Victoria, you can compare the effects of market volatilities on Lion Metal and PT Homeco 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 Homeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and PT Homeco.
Diversification Opportunities for Lion Metal and PT Homeco
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and LIVE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and PT Homeco Victoria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Homeco Victoria 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 Homeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Homeco Victoria has no effect on the direction of Lion Metal i.e., Lion Metal and PT Homeco go up and down completely randomly.
Pair Corralation between Lion Metal and PT Homeco
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the PT Homeco. In addition to that, Lion Metal is 1.09 times more volatile than PT Homeco Victoria. It trades about -0.03 of its total potential returns per unit of risk. PT Homeco Victoria is currently generating about 0.03 per unit of volatility. If you would invest 17,400 in PT Homeco Victoria on September 12, 2024 and sell it today you would earn a total of 1,500 from holding PT Homeco Victoria or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 62.46% |
| Values | Daily Returns |
Lion Metal Works vs. PT Homeco Victoria
Performance |
| Timeline |
| Lion Metal Works |
| PT Homeco Victoria |
Lion Metal and PT Homeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and PT Homeco
The main advantage of trading using opposite Lion Metal and PT Homeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, PT Homeco 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 Homeco will offset losses from the drop in PT Homeco'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 Homeco vs. Bank Central Asia | PT Homeco vs. Bank Rakyat Indonesia | PT Homeco vs. Bayan Resources Tbk | PT Homeco vs. Bank Mandiri Persero |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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