Correlation Between Lima Dua and Pioneerindo Gourmet
Can any of the company-specific risk be diversified away by investing in both Lima Dua and Pioneerindo Gourmet 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 Lima Dua and Pioneerindo Gourmet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lima Dua Lima and Pioneerindo Gourmet International, you can compare the effects of market volatilities on Lima Dua and Pioneerindo Gourmet 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 Lima Dua with a short position of Pioneerindo Gourmet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lima Dua and Pioneerindo Gourmet.
Diversification Opportunities for Lima Dua and Pioneerindo Gourmet
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lima and Pioneerindo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lima Dua Lima and Pioneerindo Gourmet Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneerindo Gourmet and Lima Dua 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 Lima Dua Lima are associated (or correlated) with Pioneerindo Gourmet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneerindo Gourmet has no effect on the direction of Lima Dua i.e., Lima Dua and Pioneerindo Gourmet go up and down completely randomly.
Pair Corralation between Lima Dua and Pioneerindo Gourmet
Assuming the 90 days trading horizon Lima Dua Lima is expected to generate 0.38 times more return on investment than Pioneerindo Gourmet. However, Lima Dua Lima is 2.66 times less risky than Pioneerindo Gourmet. It trades about -0.04 of its potential returns per unit of risk. Pioneerindo Gourmet International is currently generating about -0.04 per unit of risk. If you would invest 14,500 in Lima Dua Lima on August 29, 2024 and sell it today you would lose (2,800) from holding Lima Dua Lima or give up 19.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lima Dua Lima vs. Pioneerindo Gourmet Internatio
Performance |
| Timeline |
| Lima Dua Lima |
| Pioneerindo Gourmet |
Lima Dua and Pioneerindo Gourmet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lima Dua and Pioneerindo Gourmet
The main advantage of trading using opposite Lima Dua and Pioneerindo Gourmet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lima Dua position performs unexpectedly, Pioneerindo Gourmet 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 Pioneerindo Gourmet will offset losses from the drop in Pioneerindo Gourmet's long position.| Lima Dua vs. Imago Mulia Persada | Lima Dua vs. PT Sunter Lakeside | Lima Dua vs. Damai Sejahtera Abadi | Lima Dua vs. Panca Anugrah Wisesa |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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