Correlation Between Imago Mulia and Lima Dua

Can any of the company-specific risk be diversified away by investing in both Imago Mulia and Lima Dua 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 Imago Mulia and Lima Dua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imago Mulia Persada and Lima Dua Lima, you can compare the effects of market volatilities on Imago Mulia and Lima Dua 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 Imago Mulia with a short position of Lima Dua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imago Mulia and Lima Dua.

Diversification Opportunities for Imago Mulia and Lima Dua

-0.45

Correlation Coefficient

Imago Mulia  Lima Dua

Very good diversification

The 3 months correlation between Imago and Lima is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Imago Mulia Persada and Lima Dua Lima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lima Dua Lima and Imago 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 Imago Mulia Persada are associated (or correlated) with Lima Dua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lima Dua Lima has no effect on the direction of Imago Mulia i.e., Imago Mulia and Lima Dua go up and down completely randomly.

Pair Corralation between Imago Mulia and Lima Dua

Assuming the 90 days trading horizon Imago Mulia Persada is expected to under-perform the Lima Dua. In addition to that, Imago Mulia is 1.52 times more volatile than Lima Dua Lima. It trades about -0.03 of its total potential returns per unit of risk. Lima Dua Lima is currently generating about 0.15 per unit of volatility. If you would invest  9,800  in Lima Dua Lima on September 14, 2024 and sell it today you would earn a total of  2,700  from holding Lima Dua Lima or generate 27.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Imago Mulia Persada  vs.  Lima Dua Lima

Imago Mulia Persada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imago Mulia Persada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Lima Dua Lima

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lima Dua Lima are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Lima Dua disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imago Mulia and Lima Dua

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

The idea behind Imago Mulia Persada and Lima Dua Lima 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 CEOs Directory module to screen CEOs from public companies around the world.