Correlation Between Indointernet Tbk and Lion Metal

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

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

Diversification Opportunities for Indointernet Tbk and Lion Metal

0.67

Correlation Coefficient

Indointernet Tbk  Lion Metal

Poor diversification

The 3 months correlation between Indointernet and Lion is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Indointernet Tbk PT and Lion Metal Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Metal Works and Indointernet Tbk 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 Indointernet Tbk PT are associated (or correlated) with Lion Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Metal Works has no effect on the direction of Indointernet Tbk i.e., Indointernet Tbk and Lion Metal go up and down completely randomly.

Pair Corralation between Indointernet Tbk and Lion Metal

Assuming the 90 days trading horizon Indointernet Tbk is expected to generate 6.85 times less return on investment than Lion Metal. But when comparing it to its historical volatility, Indointernet Tbk PT is 2.19 times less risky than Lion Metal. It trades about 0.02 of its potential returns per unit of risk. Lion Metal Works is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  35,000  in Lion Metal Works on April 3, 2025 and sell it today you would earn a total of  3,600  from holding Lion Metal Works or generate 10.29% return on investment over 90 days.

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

Indointernet Tbk PT  vs.  Lion Metal Works

Indointernet Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indointernet Tbk PT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Indointernet Tbk is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Lion Metal Works

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lion Metal Works are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Lion Metal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indointernet Tbk and Lion Metal

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

The idea behind Indointernet Tbk PT and Lion Metal Works 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.