Correlation Between Lion Metal and Multi Medika
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Multi Medika 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 Multi Medika 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 Multi Medika Internasional, you can compare the effects of market volatilities on Lion Metal and Multi Medika 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 Multi Medika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Multi Medika.
Diversification Opportunities for Lion Metal and Multi Medika
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Multi is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Multi Medika Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Medika Interna 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 Multi Medika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Medika Interna has no effect on the direction of Lion Metal i.e., Lion Metal and Multi Medika go up and down completely randomly.
Pair Corralation between Lion Metal and Multi Medika
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Multi Medika. In addition to that, Lion Metal is 1.2 times more volatile than Multi Medika Internasional. It trades about -0.11 of its total potential returns per unit of risk. Multi Medika Internasional is currently generating about 0.02 per unit of volatility. If you would invest 8,100 in Multi Medika Internasional on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Multi Medika Internasional or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Lion Metal Works vs. Multi Medika Internasional
Performance |
| Timeline |
| Lion Metal Works |
| Multi Medika Interna |
Lion Metal and Multi Medika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Multi Medika
The main advantage of trading using opposite Lion Metal and Multi Medika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Multi Medika 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 Multi Medika will offset losses from the drop in Multi Medika's long position.| Lion Metal vs. PT Indonesia Kendaraan | Lion Metal vs. Surya Toto Indonesia | Lion Metal vs. Mitra Pinasthika Mustika | Lion Metal vs. Integra Indocabinet Tbk |
| Multi Medika vs. Digital Mediatama Maxima | Multi Medika vs. United Tractors Tbk | Multi Medika vs. Integra Indocabinet Tbk | Multi Medika vs. PT MNC Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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