Correlation Between Cisarua Mountain and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Cisarua Mountain 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 Cisarua Mountain and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisarua Mountain Dairy and Lautan Luas Tbk, you can compare the effects of market volatilities on Cisarua Mountain 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 Cisarua Mountain with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisarua Mountain and Lautan Luas.
Diversification Opportunities for Cisarua Mountain and Lautan Luas
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cisarua and Lautan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cisarua Mountain Dairy 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 Cisarua Mountain 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 Cisarua Mountain Dairy 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 Cisarua Mountain i.e., Cisarua Mountain and Lautan Luas go up and down completely randomly.
Pair Corralation between Cisarua Mountain and Lautan Luas
Assuming the 90 days trading horizon Cisarua Mountain Dairy is expected to under-perform the Lautan Luas. In addition to that, Cisarua Mountain is 3.63 times more volatile than Lautan Luas Tbk. It trades about -0.1 of its total potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.04 per unit of volatility. If you would invest 100,500 in Lautan Luas Tbk on September 1, 2024 and sell it today you would lose (500.00) from holding Lautan Luas Tbk or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisarua Mountain Dairy vs. Lautan Luas Tbk
Performance |
| Timeline |
| Cisarua Mountain Dairy |
| Lautan Luas Tbk |
Cisarua Mountain and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisarua Mountain and Lautan Luas
The main advantage of trading using opposite Cisarua Mountain and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisarua Mountain 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.| Cisarua Mountain vs. Garudafood Putra Putri | Cisarua Mountain vs. Estika Tata Tiara | Cisarua Mountain vs. Campina Ice Cream | Cisarua Mountain vs. PT Wahana Interfood |
| Lautan Luas vs. Lion Metal Works | Lautan Luas vs. PT Indofood Sukses | Lautan Luas vs. Cisarua Mountain Dairy | Lautan Luas vs. Indofood Cbp Sukses |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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