Correlation Between PT Pelayaran and Lion Metal
Can any of the company-specific risk be diversified away by investing in both PT Pelayaran and Lion Metal 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 PT Pelayaran and Lion Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Pelayaran Tamarin and Lion Metal Works, you can compare the effects of market volatilities on PT Pelayaran and Lion Metal 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 PT Pelayaran with a short position of Lion Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Pelayaran and Lion Metal.
Diversification Opportunities for PT Pelayaran and Lion Metal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TAMU and Lion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Pelayaran Tamarin and Lion Metal Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Metal Works and PT Pelayaran 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 PT Pelayaran Tamarin are associated (or correlated) with Lion Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Metal Works has no effect on the direction of PT Pelayaran i.e., PT Pelayaran and Lion Metal go up and down completely randomly.
Pair Corralation between PT Pelayaran and Lion Metal
Assuming the 90 days trading horizon PT Pelayaran Tamarin is expected to generate 0.94 times more return on investment than Lion Metal. However, PT Pelayaran Tamarin is 1.06 times less risky than Lion Metal. It trades about -0.18 of its potential returns per unit of risk. Lion Metal Works is currently generating about -0.19 per unit of risk. If you would invest 1,600 in PT Pelayaran Tamarin on August 29, 2024 and sell it today you would lose (300.00) from holding PT Pelayaran Tamarin or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Pelayaran Tamarin vs. Lion Metal Works
Performance |
| Timeline |
| PT Pelayaran Tamarin |
| Lion Metal Works |
PT Pelayaran and Lion Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Pelayaran and Lion Metal
The main advantage of trading using opposite PT Pelayaran and Lion Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Pelayaran position performs unexpectedly, Lion Metal 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 Lion Metal will offset losses from the drop in Lion Metal's long position.| PT Pelayaran vs. Lippo General Insurance | PT Pelayaran vs. PT Jobubu Jarum | PT Pelayaran vs. Pertamina Geothermal Energy | PT Pelayaran vs. Lion Metal Works |
| Lion Metal vs. Lionmesh Prima Tbk | Lion Metal vs. Pelangi Indah Canindo | Lion Metal vs. Indal Aluminium Industry | Lion Metal vs. Intanwijaya Internasional Tbk |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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