Correlation Between Lenox Pasifik and TransAlta
Can any of the company-specific risk be diversified away by investing in both Lenox Pasifik and TransAlta 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 TransAlta 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 TransAlta, you can compare the effects of market volatilities on Lenox Pasifik and TransAlta 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 TransAlta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenox Pasifik and TransAlta.
Diversification Opportunities for Lenox Pasifik and TransAlta
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lenox and TransAlta is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lenox Pasifik Investama and TransAlta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta 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 TransAlta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta has no effect on the direction of Lenox Pasifik i.e., Lenox Pasifik and TransAlta go up and down completely randomly.
Pair Corralation between Lenox Pasifik and TransAlta
Assuming the 90 days trading horizon Lenox Pasifik Investama is expected to generate 1.49 times more return on investment than TransAlta. However, Lenox Pasifik is 1.49 times more volatile than TransAlta. It trades about 0.03 of its potential returns per unit of risk. TransAlta is currently generating about -0.23 per unit of risk. If you would invest 0.25 in Lenox Pasifik Investama on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Lenox Pasifik Investama or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenox Pasifik Investama vs. TransAlta
Performance |
| Timeline |
| Lenox Pasifik Investama |
| TransAlta |
Lenox Pasifik and TransAlta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenox Pasifik and TransAlta
The main advantage of trading using opposite Lenox Pasifik and TransAlta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenox Pasifik position performs unexpectedly, TransAlta 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 TransAlta will offset losses from the drop in TransAlta's long position.| Lenox Pasifik vs. Morgan Stanley | Lenox Pasifik vs. Superior Plus Corp | Lenox Pasifik vs. Origin Agritech | Lenox Pasifik vs. Identiv |
| TransAlta vs. CN YANGTPWR GDR | TransAlta vs. Siemens Energy AG | TransAlta vs. Vistra Corp | TransAlta vs. Datang International Power |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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