Correlation Between Star Pacific and Lenox Pasifik
Can any of the company-specific risk be diversified away by investing in both Star Pacific and Lenox Pasifik 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 Star Pacific and Lenox Pasifik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Pacific Tbk and Lenox Pasifik Investama, you can compare the effects of market volatilities on Star Pacific and Lenox Pasifik 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 Star Pacific with a short position of Lenox Pasifik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Pacific and Lenox Pasifik.
Diversification Opportunities for Star Pacific and Lenox Pasifik
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Star and Lenox is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Star Pacific Tbk and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik Investama and Star Pacific 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 Star Pacific Tbk are associated (or correlated) with Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Star Pacific i.e., Star Pacific and Lenox Pasifik go up and down completely randomly.
Pair Corralation between Star Pacific and Lenox Pasifik
Assuming the 90 days trading horizon Star Pacific Tbk is expected to generate 0.3 times more return on investment than Lenox Pasifik. However, Star Pacific Tbk is 3.3 times less risky than Lenox Pasifik. It trades about -0.08 of its potential returns per unit of risk. Lenox Pasifik Investama is currently generating about -0.09 per unit of risk. If you would invest 27,000 in Star Pacific Tbk on August 26, 2024 and sell it today you would lose (1,000.00) from holding Star Pacific Tbk or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Pacific Tbk vs. Lenox Pasifik Investama
Performance |
| Timeline |
| Star Pacific Tbk |
| Lenox Pasifik Investama |
Star Pacific and Lenox Pasifik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Pacific and Lenox Pasifik
The main advantage of trading using opposite Star Pacific and Lenox Pasifik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Pacific position performs unexpectedly, Lenox Pasifik 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 Lenox Pasifik will offset losses from the drop in Lenox Pasifik's long position.| Star Pacific vs. Mnc Land Tbk | Star Pacific vs. MNC Vision Networks | Star Pacific vs. MD Pictures Tbk | Star Pacific vs. Medikaloka Hermina PT |
| Lenox Pasifik vs. Star Pacific Tbk | Lenox Pasifik vs. Multipolar Tbk | Lenox Pasifik vs. Lippo General Insurance | Lenox Pasifik vs. Paninvest Tbk |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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