Correlation Between Lion Metal and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both Lion Metal and Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama Tbk, you can compare the effects of market volatilities on Lion Metal and Indo Acidatama 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 Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Metal and Indo Acidatama.
Diversification Opportunities for Lion Metal and Indo Acidatama
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lion and Indo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lion Metal Works and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama 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 Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of Lion Metal i.e., Lion Metal and Indo Acidatama go up and down completely randomly.
Pair Corralation between Lion Metal and Indo Acidatama
Assuming the 90 days trading horizon Lion Metal Works is expected to under-perform the Indo Acidatama. In addition to that, Lion Metal is 4.96 times more volatile than Indo Acidatama Tbk. It trades about -0.25 of its total potential returns per unit of risk. Indo Acidatama Tbk is currently generating about 0.01 per unit of volatility. If you would invest 5,000 in Indo Acidatama Tbk on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Indo Acidatama Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Metal Works vs. Indo Acidatama Tbk
Performance |
| Timeline |
| Lion Metal Works |
| Indo Acidatama Tbk |
Lion Metal and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Metal and Indo Acidatama
The main advantage of trading using opposite Lion Metal and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Metal position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama's 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 |
| Indo Acidatama vs. Timah Persero Tbk | Indo Acidatama vs. Semen Indonesia Persero | Indo Acidatama vs. Mitra Pinasthika Mustika | Indo Acidatama vs. Jakarta Int Hotels |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |