Correlation Between PT Bank and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both PT Bank and Lautan Luas 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 PT Bank and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Bisnis and Lautan Luas Tbk, you can compare the effects of market volatilities on PT Bank and Lautan Luas 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 PT Bank with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Lautan Luas.
Diversification Opportunities for PT Bank and Lautan Luas
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BBSI and Lautan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Bisnis and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas Tbk and PT Bank 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 PT Bank Bisnis are associated (or correlated) with Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of PT Bank i.e., PT Bank and Lautan Luas go up and down completely randomly.
Pair Corralation between PT Bank and Lautan Luas
Assuming the 90 days trading horizon PT Bank Bisnis is expected to under-perform the Lautan Luas. But the stock apears to be less risky and, when comparing its historical volatility, PT Bank Bisnis is 1.94 times less risky than Lautan Luas. The stock trades about -0.11 of its potential returns per unit of risk. The Lautan Luas Tbk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 100,500 in Lautan Luas Tbk on October 20, 2024 and sell it today you would earn a total of 1,000.00 from holding Lautan Luas Tbk or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Bisnis vs. Lautan Luas Tbk
Performance |
| Timeline |
| PT Bank Bisnis |
| Lautan Luas Tbk |
PT Bank and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Lautan Luas
The main advantage of trading using opposite PT Bank and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.| PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Ganesha Tbk | PT Bank vs. Bank Capital Indonesia |
| Lautan Luas vs. Pertamina Geothermal Energy | Lautan Luas vs. Optima Prima Metal | Lautan Luas vs. City Retail Developments | Lautan Luas vs. Weha Transportasi Indonesia |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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