Correlation Between LION ONE and INDO RAMA

Can any of the company-specific risk be diversified away by investing in both LION ONE and INDO RAMA 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 LION ONE and INDO RAMA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LION ONE METALS and INDO RAMA SYNTHETIC, you can compare the effects of market volatilities on LION ONE and INDO RAMA 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 LION ONE with a short position of INDO RAMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and INDO RAMA.

Diversification Opportunities for LION ONE and INDO RAMA

0.0

Correlation Coefficient

LION ONE  INDO RAMA

Pay attention - limited upside

The 3 months correlation between LION and INDO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and INDO RAMA SYNTHETIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDO RAMA SYNTHETIC and LION ONE 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 LION ONE METALS are associated (or correlated) with INDO RAMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDO RAMA SYNTHETIC has no effect on the direction of LION ONE i.e., LION ONE and INDO RAMA go up and down completely randomly.

Pair Corralation between LION ONE and INDO RAMA

Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the INDO RAMA. In addition to that, LION ONE is 1.39 times more volatile than INDO RAMA SYNTHETIC. It trades about -0.04 of its total potential returns per unit of risk. INDO RAMA SYNTHETIC is currently generating about -0.02 per unit of volatility. If you would invest  35.00  in INDO RAMA SYNTHETIC on October 14, 2024 and sell it today you would lose (14.00) from holding INDO RAMA SYNTHETIC or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

LION ONE METALS  vs.  INDO RAMA SYNTHETIC

LION ONE METALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LION ONE METALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, LION ONE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO RAMA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LION ONE and INDO RAMA

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

The idea behind LION ONE METALS and INDO RAMA SYNTHETIC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.