Correlation Between Lion Metal and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Lautan Luas 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 Lautan Luas 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 Lautan Luas Tbk, you can compare the effects of market volatilities on Lion Metal and Lautan Luas 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 Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Lautan Luas.
Diversification Opportunities for Lion Metal and Lautan Luas
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Lautan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas 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 Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of Lion Metal i.e., Lion Metal and Lautan Luas go up and down completely randomly.
Pair Corralation between Lion Metal and Lautan Luas
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Lautan Luas. In addition to that, Lion Metal is 4.53 times more volatile than Lautan Luas Tbk. It trades about -0.15 of its total potential returns per unit of risk. Lautan Luas Tbk is currently generating about 0.0 per unit of volatility. If you would invest 100,000 in Lautan Luas Tbk on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Lautan Luas Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. Lautan Luas Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Lautan Luas Tbk |
Lion Metal and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Lautan Luas
The main advantage of trading using opposite Lion Metal and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.| Lion Metal vs. Intanwijaya Internasional Tbk | Lion Metal vs. Champion Pacific Indonesia | Lion Metal vs. Mitra Pinasthika Mustika | Lion Metal vs. Jakarta Int Hotels |
| Lautan Luas vs. Tridomain Performance Materials | Lautan Luas vs. Yelooo Integra Datanet | Lautan Luas vs. PT Charlie Hospital | Lautan Luas vs. Dharma Polimetal 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 Stocks Directory module to find actively traded stocks across global markets.
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