Correlation Between Garuda Maintenance and Lionmesh Prima
Can any of the company-specific risk be diversified away by investing in both Garuda Maintenance 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 Garuda Maintenance and Lionmesh Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garuda Maintenance Facility and Lionmesh Prima Tbk, you can compare the effects of market volatilities on Garuda Maintenance 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 Garuda Maintenance with a short position of Lionmesh Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Maintenance and Lionmesh Prima.
Diversification Opportunities for Garuda Maintenance and Lionmesh Prima
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Garuda and Lionmesh is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Maintenance Facility 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 Garuda Maintenance 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 Garuda Maintenance Facility 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 Garuda Maintenance i.e., Garuda Maintenance and Lionmesh Prima go up and down completely randomly.
Pair Corralation between Garuda Maintenance and Lionmesh Prima
Assuming the 90 days trading horizon Garuda Maintenance Facility is expected to under-perform the Lionmesh Prima. In addition to that, Garuda Maintenance is 2.31 times more volatile than Lionmesh Prima Tbk. It trades about -0.18 of its total potential returns per unit of risk. Lionmesh Prima Tbk is currently generating about 0.1 per unit of volatility. If you would invest 36,800 in Lionmesh Prima Tbk on March 10, 2024 and sell it today you would earn a total of 2,800 from holding Lionmesh Prima Tbk or generate 7.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.08% |
Values | Daily Returns |
Garuda Maintenance Facility vs. Lionmesh Prima Tbk
Performance |
Timeline |
Garuda Maintenance |
Lionmesh Prima Tbk |
Garuda Maintenance and Lionmesh Prima Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Garuda Maintenance and Lionmesh Prima
The main advantage of trading using opposite Garuda Maintenance and Lionmesh Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garuda Maintenance 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.The idea behind Garuda Maintenance Facility and Lionmesh Prima Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Lionmesh Prima vs. Lion Metal Works | Lionmesh Prima vs. Pelangi Indah Canindo | Lionmesh Prima vs. Tembaga Mulia Semanan | Lionmesh Prima vs. PT Mulia Industrindo |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |