Correlation Between Lionmesh Prima and Lion Metal
Can any of the company-specific risk be diversified away by investing in both Lionmesh Prima and Lion Metal 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 Lion Metal 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 Lion Metal Works, you can compare the effects of market volatilities on Lionmesh Prima and Lion Metal 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 Lion Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionmesh Prima and Lion Metal.
Diversification Opportunities for Lionmesh Prima and Lion Metal
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lionmesh and Lion is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lionmesh Prima Tbk and Lion Metal Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Metal Works 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 Lion Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Metal Works has no effect on the direction of Lionmesh Prima i.e., Lionmesh Prima and Lion Metal go up and down completely randomly.
Pair Corralation between Lionmesh Prima and Lion Metal
Assuming the 90 days trading horizon Lionmesh Prima Tbk is expected to under-perform the Lion Metal. But the stock apears to be less risky and, when comparing its historical volatility, Lionmesh Prima Tbk is 2.12 times less risky than Lion Metal. The stock trades about -0.05 of its potential returns per unit of risk. The Lion Metal Works is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 48,756 in Lion Metal Works on August 30, 2024 and sell it today you would lose (18,756) from holding Lion Metal Works or give up 38.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lionmesh Prima Tbk vs. Lion Metal Works
Performance |
| Timeline |
| Lionmesh Prima Tbk |
| Lion Metal Works |
Lionmesh Prima and Lion Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lionmesh Prima and Lion Metal
The main advantage of trading using opposite Lionmesh Prima and Lion Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionmesh Prima position performs unexpectedly, Lion Metal 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 Lion Metal will offset losses from the drop in Lion Metal's long position.| Lionmesh Prima vs. Lion Metal Works | Lionmesh Prima vs. Pelangi Indah Canindo | Lionmesh Prima vs. Indal Aluminium Industry | Lionmesh Prima vs. Tembaga Mulia Semanan |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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