Correlation Between Suntory Beverage and Lenox Pasifik

Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Lenox Pasifik 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 Suntory Beverage and Lenox Pasifik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suntory Beverage Food and Lenox Pasifik Investama, you can compare the effects of market volatilities on Suntory Beverage and Lenox Pasifik 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 Suntory Beverage with a short position of Lenox Pasifik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Lenox Pasifik.

Diversification Opportunities for Suntory Beverage and Lenox Pasifik

-0.13

Correlation Coefficient

Suntory Beverage  Lenox Pasifik

Good diversification

The 3 months correlation between Suntory and Lenox is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik Investama and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Lenox Pasifik go up and down completely randomly.

Pair Corralation between Suntory Beverage and Lenox Pasifik

Assuming the 90 days horizon Suntory Beverage Food is expected to under-perform the Lenox Pasifik. But the stock apears to be less risky and, when comparing its historical volatility, Suntory Beverage Food is 4.2 times less risky than Lenox Pasifik. The stock trades about -0.01 of its potential returns per unit of risk. The Lenox Pasifik Investama is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.25  in Lenox Pasifik Investama on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Lenox Pasifik Investama or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Suntory Beverage Food  vs.  Lenox Pasifik Investama

Suntory Beverage Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suntory Beverage Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Suntory Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lenox Pasifik Investama

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lenox Pasifik Investama are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Lenox Pasifik reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suntory Beverage and Lenox Pasifik

The main advantage of trading using opposite Suntory Beverage and Lenox Pasifik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Lenox Pasifik 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 Lenox Pasifik will offset losses from the drop in Lenox Pasifik's long position.

The idea behind Suntory Beverage Food and Lenox Pasifik Investama 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.