Correlation Between Lion Metal and Lionmesh Prima
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Lionmesh Prima 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 Lionmesh Prima 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 Lionmesh Prima Tbk, you can compare the effects of market volatilities on Lion Metal and Lionmesh Prima 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 Lionmesh Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Lionmesh Prima.
Diversification Opportunities for Lion Metal and Lionmesh Prima
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Lionmesh is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Lionmesh Prima Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionmesh Prima 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 Lionmesh Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionmesh Prima Tbk has no effect on the direction of Lion Metal i.e., Lion Metal and Lionmesh Prima go up and down completely randomly.
Pair Corralation between Lion Metal and Lionmesh Prima
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Lionmesh Prima. In addition to that, Lion Metal is 1.33 times more volatile than Lionmesh Prima Tbk. It trades about -0.12 of its total potential returns per unit of risk. Lionmesh Prima Tbk is currently generating about 0.0 per unit of volatility. If you would invest 44,000 in Lionmesh Prima Tbk on August 27, 2024 and sell it today you would lose (2,200) from holding Lionmesh Prima Tbk or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. Lionmesh Prima Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Lionmesh Prima Tbk |
Lion Metal and Lionmesh Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Lionmesh Prima
The main advantage of trading using opposite Lion Metal and Lionmesh Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Lionmesh Prima 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 Lionmesh Prima will offset losses from the drop in Lionmesh Prima'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 |
| Lionmesh Prima vs. Lion Metal Works | Lionmesh Prima vs. Pelangi Indah Canindo | Lionmesh Prima vs. Indal Aluminium Industry | Lionmesh Prima vs. Tembaga Mulia Semanan |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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