Correlation Between Lionmesh Prima and Bundamedik Tbk

Can any of the company-specific risk be diversified away by investing in both Lionmesh Prima and Bundamedik Tbk 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 Lionmesh Prima and Bundamedik Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lionmesh Prima Tbk and Bundamedik Tbk PT, you can compare the effects of market volatilities on Lionmesh Prima and Bundamedik Tbk 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 Lionmesh Prima with a short position of Bundamedik Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionmesh Prima and Bundamedik Tbk.

Diversification Opportunities for Lionmesh Prima and Bundamedik Tbk

-0.11

Correlation Coefficient

Lionmesh Prima  Bundamedik Tbk

Good diversification

The 3 months correlation between Lionmesh and Bundamedik is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lionmesh Prima Tbk and Bundamedik Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bundamedik Tbk PT and Lionmesh Prima 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 Lionmesh Prima Tbk are associated (or correlated) with Bundamedik Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bundamedik Tbk PT has no effect on the direction of Lionmesh Prima i.e., Lionmesh Prima and Bundamedik Tbk go up and down completely randomly.

Pair Corralation between Lionmesh Prima and Bundamedik Tbk

Assuming the 90 days trading horizon Lionmesh Prima Tbk is expected to under-perform the Bundamedik Tbk. In addition to that, Lionmesh Prima is 1.4 times more volatile than Bundamedik Tbk PT. It trades about -0.06 of its total potential returns per unit of risk. Bundamedik Tbk PT is currently generating about -0.07 per unit of volatility. If you would invest  29,600  in Bundamedik Tbk PT on September 3, 2024 and sell it today you would lose (2,800) from holding Bundamedik Tbk PT or give up 9.46% of portfolio value over 90 days.

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

Lionmesh Prima Tbk  vs.  Bundamedik Tbk PT

Lionmesh Prima Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lionmesh Prima Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.

Bundamedik Tbk PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bundamedik Tbk PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.

Pair Trading with Lionmesh Prima and Bundamedik Tbk

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

The idea behind Lionmesh Prima Tbk and Bundamedik Tbk PT 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.