Correlation Between Communication Cable and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Communication Cable 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 Communication Cable and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Cable Systems and Lautan Luas Tbk, you can compare the effects of market volatilities on Communication Cable 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 Communication Cable with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Lautan Luas.
Diversification Opportunities for Communication Cable and Lautan Luas
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Communication and Lautan is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems 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 Communication Cable 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 Communication Cable Systems 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 Communication Cable i.e., Communication Cable and Lautan Luas go up and down completely randomly.
Pair Corralation between Communication Cable and Lautan Luas
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 25.54 times more return on investment than Lautan Luas. However, Communication Cable is 25.54 times more volatile than Lautan Luas Tbk. It trades about 0.45 of its potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.56 per unit of risk. If you would invest 27,600 in Communication Cable Systems on November 27, 2024 and sell it today you would earn a total of 20,600 from holding Communication Cable Systems or generate 74.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication Cable Systems vs. Lautan Luas Tbk
Performance |
| Timeline |
| Communication Cable |
| Lautan Luas Tbk |
Communication Cable and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Lautan Luas
The main advantage of trading using opposite Communication Cable and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable 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.| Communication Cable vs. Berkah Prima Perkasa | Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri |
| Lautan Luas vs. Weha Transportasi Indonesia | Lautan Luas vs. Intermedia Capital Tbk | Lautan Luas vs. Trinitan Metals and | Lautan Luas vs. Tera Data Indonusa |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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