Correlation Between Lenox Pasifik and Mandala Multifinance
Can any of the company-specific risk be diversified away by investing in both Lenox Pasifik and Mandala Multifinance 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 Mandala Multifinance 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 Mandala Multifinance Tbk, you can compare the effects of market volatilities on Lenox Pasifik and Mandala Multifinance 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 Mandala Multifinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenox Pasifik and Mandala Multifinance.
Diversification Opportunities for Lenox Pasifik and Mandala Multifinance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lenox and Mandala is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lenox Pasifik Investama and Mandala Multifinance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mandala Multifinance Tbk 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 Mandala Multifinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mandala Multifinance Tbk has no effect on the direction of Lenox Pasifik i.e., Lenox Pasifik and Mandala Multifinance go up and down completely randomly.
Pair Corralation between Lenox Pasifik and Mandala Multifinance
Assuming the 90 days trading horizon Lenox Pasifik is expected to generate 3.58 times less return on investment than Mandala Multifinance. But when comparing it to its historical volatility, Lenox Pasifik Investama is 1.36 times less risky than Mandala Multifinance. It trades about 0.07 of its potential returns per unit of risk. Mandala Multifinance Tbk is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 152,632 in Mandala Multifinance Tbk on August 25, 2024 and sell it today you would earn a total of 182,368 from holding Mandala Multifinance Tbk or generate 119.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Lenox Pasifik Investama vs. Mandala Multifinance Tbk
Performance |
| Timeline |
| Lenox Pasifik Investama |
| Mandala Multifinance Tbk |
Lenox Pasifik and Mandala Multifinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenox Pasifik and Mandala Multifinance
The main advantage of trading using opposite Lenox Pasifik and Mandala Multifinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenox Pasifik position performs unexpectedly, Mandala Multifinance 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 Mandala Multifinance will offset losses from the drop in Mandala Multifinance's long position.| Lenox Pasifik vs. Multipolar Tbk | Lenox Pasifik vs. Lippo General Insurance | Lenox Pasifik vs. Paninvest Tbk |
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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 Directory module to find actively traded commodities issued by global exchanges.
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