Correlation Between Limas Indonesia and Optima Prima
Can any of the company-specific risk be diversified away by investing in both Limas Indonesia and Optima 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 Limas Indonesia and Optima Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limas Indonesia Makmur and Optima Prima Metal, you can compare the effects of market volatilities on Limas Indonesia and Optima 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 Limas Indonesia with a short position of Optima Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limas Indonesia and Optima Prima.
Diversification Opportunities for Limas Indonesia and Optima Prima
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Limas and Optima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Limas Indonesia Makmur and Optima Prima Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Prima Metal and Limas Indonesia 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 Limas Indonesia Makmur are associated (or correlated) with Optima Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Prima Metal has no effect on the direction of Limas Indonesia i.e., Limas Indonesia and Optima Prima go up and down completely randomly.
Pair Corralation between Limas Indonesia and Optima Prima
If you would invest 5,000 in Limas Indonesia Makmur on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Limas Indonesia Makmur or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limas Indonesia Makmur vs. Optima Prima Metal
Performance |
| Timeline |
| Limas Indonesia Makmur |
| Optima Prima Metal |
Limas Indonesia and Optima Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limas Indonesia and Optima Prima
The main advantage of trading using opposite Limas Indonesia and Optima Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limas Indonesia position performs unexpectedly, Optima 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 Optima Prima will offset losses from the drop in Optima Prima's long position.| Limas Indonesia vs. Trinitan Metals and | Limas Indonesia vs. Envy Technologies Indonesia | Limas Indonesia vs. Panin Financial Tbk | Limas Indonesia vs. Hero Supermarket Tbk |
| Optima Prima vs. Gunung Raja Paksi | Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Sentral Mitra Informatika |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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