Correlation Between Trimegah Karya and Lion Metal
Can any of the company-specific risk be diversified away by investing in both Trimegah Karya 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 Trimegah Karya and Lion Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimegah Karya Pratama and Lion Metal Works, you can compare the effects of market volatilities on Trimegah Karya 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 Trimegah Karya with a short position of Lion Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Karya and Lion Metal.
Diversification Opportunities for Trimegah Karya and Lion Metal
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trimegah and Lion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama 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 Trimegah Karya 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 Trimegah Karya Pratama 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 Trimegah Karya i.e., Trimegah Karya and Lion Metal go up and down completely randomly.
Pair Corralation between Trimegah Karya and Lion Metal
Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to generate 1.02 times more return on investment than Lion Metal. However, Trimegah Karya is 1.02 times more volatile than Lion Metal Works. It trades about -0.01 of its potential returns per unit of risk. Lion Metal Works is currently generating about -0.03 per unit of risk. If you would invest 9,865 in Trimegah Karya Pratama on August 31, 2024 and sell it today you would lose (3,265) from holding Trimegah Karya Pratama or give up 33.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Trimegah Karya Pratama vs. Lion Metal Works
Performance |
| Timeline |
| Trimegah Karya Pratama |
| Lion Metal Works |
Trimegah Karya and Lion Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimegah Karya and Lion Metal
The main advantage of trading using opposite Trimegah Karya and Lion Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimegah Karya 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.| Trimegah Karya vs. Lippo General Insurance | Trimegah Karya vs. Trinitan Metals and | Trimegah Karya vs. Prima Alloy Steel | Trimegah Karya vs. Capital Financial Indonesia |
| Lion Metal vs. Matahari Department Store | Lion Metal vs. Multi Medika Internasional | Lion Metal vs. Visi Media Asia | Lion Metal vs. Bayan Resources 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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