Correlation Between Lionmesh Prima and Kabelindo Murni

Can any of the company-specific risk be diversified away by investing in both Lionmesh Prima and Kabelindo Murni 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 Kabelindo Murni 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 Kabelindo Murni Tbk, you can compare the effects of market volatilities on Lionmesh Prima and Kabelindo Murni 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 Kabelindo Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionmesh Prima and Kabelindo Murni.

Diversification Opportunities for Lionmesh Prima and Kabelindo Murni

0.58

Correlation Coefficient

Lionmesh Prima  Kabelindo Murni

Very weak diversification

The 3 months correlation between Lionmesh and Kabelindo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lionmesh Prima Tbk and Kabelindo Murni Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kabelindo Murni Tbk 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 Kabelindo Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kabelindo Murni Tbk has no effect on the direction of Lionmesh Prima i.e., Lionmesh Prima and Kabelindo Murni go up and down completely randomly.

Pair Corralation between Lionmesh Prima and Kabelindo Murni

Assuming the 90 days trading horizon Lionmesh Prima Tbk is expected to under-perform the Kabelindo Murni. In addition to that, Lionmesh Prima is 1.54 times more volatile than Kabelindo Murni Tbk. It trades about -0.08 of its total potential returns per unit of risk. Kabelindo Murni Tbk is currently generating about -0.02 per unit of volatility. If you would invest  29,000  in Kabelindo Murni Tbk on December 1, 2024 and sell it today you would lose (1,400) from holding Kabelindo Murni Tbk or give up 4.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Lionmesh Prima Tbk  vs.  Kabelindo Murni Tbk

Lionmesh Prima Tbk

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Kabelindo Murni Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kabelindo Murni Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Kabelindo Murni is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lionmesh Prima and Kabelindo Murni

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

The idea behind Lionmesh Prima Tbk and Kabelindo Murni 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.