Correlation Between Lenox Pasifik and Bank Mnc
Can any of the company-specific risk be diversified away by investing in both Lenox Pasifik and Bank Mnc 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 Lenox Pasifik and Bank Mnc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenox Pasifik Investama and Bank Mnc Internasional, you can compare the effects of market volatilities on Lenox Pasifik and Bank Mnc 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 Lenox Pasifik with a short position of Bank Mnc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenox Pasifik and Bank Mnc.
Diversification Opportunities for Lenox Pasifik and Bank Mnc
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lenox and Bank is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lenox Pasifik Investama and Bank Mnc Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mnc Internasional and Lenox Pasifik 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 Lenox Pasifik Investama are associated (or correlated) with Bank Mnc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mnc Internasional has no effect on the direction of Lenox Pasifik i.e., Lenox Pasifik and Bank Mnc go up and down completely randomly.
Pair Corralation between Lenox Pasifik and Bank Mnc
Assuming the 90 days trading horizon Lenox Pasifik is expected to generate 1.58 times less return on investment than Bank Mnc. In addition to that, Lenox Pasifik is 1.07 times more volatile than Bank Mnc Internasional. It trades about 0.03 of its total potential returns per unit of risk. Bank Mnc Internasional is currently generating about 0.05 per unit of volatility. If you would invest 5,000 in Bank Mnc Internasional on August 31, 2024 and sell it today you would earn a total of 800.00 from holding Bank Mnc Internasional or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenox Pasifik Investama vs. Bank Mnc Internasional
Performance |
| Timeline |
| Lenox Pasifik Investama |
| Bank Mnc Internasional |
Lenox Pasifik and Bank Mnc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenox Pasifik and Bank Mnc
The main advantage of trading using opposite Lenox Pasifik and Bank Mnc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenox Pasifik position performs unexpectedly, Bank Mnc 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 Bank Mnc will offset losses from the drop in Bank Mnc's long position.| Lenox Pasifik vs. Star Pacific Tbk | Lenox Pasifik vs. Multipolar Tbk | Lenox Pasifik vs. Lippo General Insurance | Lenox Pasifik vs. Paninvest Tbk |
| Bank Mnc vs. Bank Capital Indonesia | Bank Mnc vs. Bank Pembangunan Daerah | Bank Mnc vs. Bank Victoria International | Bank Mnc vs. Bank Qnb Indonesia |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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