Correlation Between Lenox Pasifik and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both Lenox Pasifik and Hitachi Construction 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 Hitachi Construction 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 Hitachi Construction Machinery, you can compare the effects of market volatilities on Lenox Pasifik and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenox Pasifik and Hitachi Construction.
Diversification Opportunities for Lenox Pasifik and Hitachi Construction
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lenox and Hitachi is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lenox Pasifik Investama and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of Lenox Pasifik i.e., Lenox Pasifik and Hitachi Construction go up and down completely randomly.
Pair Corralation between Lenox Pasifik and Hitachi Construction
If you would invest 2,100 in Hitachi Construction Machinery on October 19, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Construction Machinery or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenox Pasifik Investama vs. Hitachi Construction Machinery
Performance |
| Timeline |
| Lenox Pasifik Investama |
| Hitachi Construction |
Lenox Pasifik and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenox Pasifik and Hitachi Construction
The main advantage of trading using opposite Lenox Pasifik and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenox Pasifik position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| Lenox Pasifik vs. Morgan Stanley | Lenox Pasifik vs. Morgan Stanley | Lenox Pasifik vs. The Charles Schwab | Lenox Pasifik vs. The Goldman Sachs |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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