Correlation Between Lionmesh Prima and Ladangbaja Murni
Can any of the company-specific risk be diversified away by investing in both Lionmesh Prima and Ladangbaja Murni 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 Lionmesh Prima and Ladangbaja Murni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lionmesh Prima Tbk and Ladangbaja Murni PT, you can compare the effects of market volatilities on Lionmesh Prima and Ladangbaja Murni 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 Lionmesh Prima with a short position of Ladangbaja Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionmesh Prima and Ladangbaja Murni.
Diversification Opportunities for Lionmesh Prima and Ladangbaja Murni
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lionmesh and Ladangbaja is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lionmesh Prima Tbk and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni and Lionmesh Prima 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 Lionmesh Prima Tbk are associated (or correlated) with Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of Lionmesh Prima i.e., Lionmesh Prima and Ladangbaja Murni go up and down completely randomly.
Pair Corralation between Lionmesh Prima and Ladangbaja Murni
Assuming the 90 days trading horizon Lionmesh Prima Tbk is expected to generate 0.35 times more return on investment than Ladangbaja Murni. However, Lionmesh Prima Tbk is 2.88 times less risky than Ladangbaja Murni. It trades about -0.07 of its potential returns per unit of risk. Ladangbaja Murni PT is currently generating about -0.09 per unit of risk. If you would invest 40,000 in Lionmesh Prima Tbk on September 2, 2024 and sell it today you would lose (5,000) from holding Lionmesh Prima Tbk or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lionmesh Prima Tbk vs. Ladangbaja Murni PT
Performance |
| Timeline |
| Lionmesh Prima Tbk |
| Ladangbaja Murni |
Lionmesh Prima and Ladangbaja Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lionmesh Prima and Ladangbaja Murni
The main advantage of trading using opposite Lionmesh Prima and Ladangbaja Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionmesh Prima position performs unexpectedly, Ladangbaja Murni 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 Ladangbaja Murni will offset losses from the drop in Ladangbaja Murni's long position.| Lionmesh Prima vs. Ladangbaja Murni PT | Lionmesh Prima vs. Berkah Beton Sadaya | Lionmesh Prima vs. Cahayaputra Asa Keramik | Lionmesh Prima vs. Diagnos Laboratorium Utama |
| Ladangbaja Murni vs. PAM Mineral Tbk | Ladangbaja Murni vs. Nusa Palapa Gemilang | Ladangbaja Murni vs. Diagnos Laboratorium Utama | Ladangbaja Murni vs. PT Sunter Lakeside |
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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