Correlation Between Tembaga Mulia and Lionmesh Prima
Can any of the company-specific risk be diversified away by investing in both Tembaga Mulia and Lionmesh Prima 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 Tembaga Mulia and Lionmesh Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tembaga Mulia Semanan and Lionmesh Prima Tbk, you can compare the effects of market volatilities on Tembaga Mulia and Lionmesh Prima 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 Tembaga Mulia with a short position of Lionmesh Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tembaga Mulia and Lionmesh Prima.
Diversification Opportunities for Tembaga Mulia and Lionmesh Prima
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tembaga and Lionmesh is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tembaga Mulia Semanan and Lionmesh Prima Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionmesh Prima Tbk and Tembaga Mulia 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 Tembaga Mulia Semanan are associated (or correlated) with Lionmesh Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionmesh Prima Tbk has no effect on the direction of Tembaga Mulia i.e., Tembaga Mulia and Lionmesh Prima go up and down completely randomly.
Pair Corralation between Tembaga Mulia and Lionmesh Prima
Assuming the 90 days trading horizon Tembaga Mulia Semanan is expected to generate 1.0 times more return on investment than Lionmesh Prima. However, Tembaga Mulia Semanan is 1.0 times less risky than Lionmesh Prima. It trades about 0.14 of its potential returns per unit of risk. Lionmesh Prima Tbk is currently generating about -0.31 per unit of risk. If you would invest 88,500 in Tembaga Mulia Semanan on August 30, 2024 and sell it today you would earn a total of 6,500 from holding Tembaga Mulia Semanan or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tembaga Mulia Semanan vs. Lionmesh Prima Tbk
Performance |
| Timeline |
| Tembaga Mulia Semanan |
| Lionmesh Prima Tbk |
Tembaga Mulia and Lionmesh Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tembaga Mulia and Lionmesh Prima
The main advantage of trading using opposite Tembaga Mulia and Lionmesh Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tembaga Mulia position performs unexpectedly, Lionmesh Prima 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 Lionmesh Prima will offset losses from the drop in Lionmesh Prima's long position.| Tembaga Mulia vs. Unggul Indah Cahaya | Tembaga Mulia vs. Surya Toto Indonesia | Tembaga Mulia vs. Pelangi Indah Canindo | Tembaga Mulia vs. Trias Sentosa Tbk |
| Lionmesh Prima vs. Lion Metal Works | Lionmesh Prima vs. Pelangi Indah Canindo | Lionmesh Prima vs. Indal Aluminium Industry | Lionmesh Prima vs. Tembaga Mulia Semanan |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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