Correlation Between Lenox Pasifik and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Lenox Pasifik and Victoria Insurance 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 Victoria Insurance 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 Victoria Insurance Tbk, you can compare the effects of market volatilities on Lenox Pasifik and Victoria Insurance 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 Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenox Pasifik and Victoria Insurance.
Diversification Opportunities for Lenox Pasifik and Victoria Insurance
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lenox and Victoria is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lenox Pasifik Investama and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance 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 Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Lenox Pasifik i.e., Lenox Pasifik and Victoria Insurance go up and down completely randomly.
Pair Corralation between Lenox Pasifik and Victoria Insurance
Assuming the 90 days trading horizon Lenox Pasifik Investama is expected to generate 5.5 times more return on investment than Victoria Insurance. However, Lenox Pasifik is 5.5 times more volatile than Victoria Insurance Tbk. It trades about 0.1 of its potential returns per unit of risk. Victoria Insurance Tbk is currently generating about -0.09 per unit of risk. If you would invest 5,500 in Lenox Pasifik Investama on August 26, 2024 and sell it today you would earn a total of 1,200 from holding Lenox Pasifik Investama or generate 21.82% 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. Victoria Insurance Tbk
Performance |
| Timeline |
| Lenox Pasifik Investama |
| Victoria Insurance Tbk |
Lenox Pasifik and Victoria Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenox Pasifik and Victoria Insurance
The main advantage of trading using opposite Lenox Pasifik and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenox Pasifik position performs unexpectedly, Victoria Insurance 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 Victoria Insurance will offset losses from the drop in Victoria Insurance's long position.| Lenox Pasifik vs. Paninvest Tbk | Lenox Pasifik vs. Panin Sekuritas Tbk | Lenox Pasifik vs. Wahana Ottomitra Multiartha |
| Victoria Insurance vs. Victoria Investama Tbk | Victoria Insurance vs. Verena Multi Finance | Victoria Insurance vs. Asuransi Harta Aman | Victoria Insurance vs. Trust Finance 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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