Correlation Between Diamond Citra and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Diamond Citra and Lancartama Sejati 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 Diamond Citra and Lancartama Sejati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Citra Propertindo and Lancartama Sejati Tbk, you can compare the effects of market volatilities on Diamond Citra and Lancartama Sejati 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 Diamond Citra with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Citra and Lancartama Sejati.
Diversification Opportunities for Diamond Citra and Lancartama Sejati
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Diamond and Lancartama is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Citra Propertindo and Lancartama Sejati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancartama Sejati Tbk and Diamond Citra 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 Diamond Citra Propertindo are associated (or correlated) with Lancartama Sejati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancartama Sejati Tbk has no effect on the direction of Diamond Citra i.e., Diamond Citra and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Diamond Citra and Lancartama Sejati
Assuming the 90 days trading horizon Diamond Citra Propertindo is expected to generate 1.33 times more return on investment than Lancartama Sejati. However, Diamond Citra is 1.33 times more volatile than Lancartama Sejati Tbk. It trades about 0.11 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about 0.09 per unit of risk. If you would invest 400.00 in Diamond Citra Propertindo on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Diamond Citra Propertindo or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Diamond Citra Propertindo vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Diamond Citra Propertindo |
| Lancartama Sejati Tbk |
Diamond Citra and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Citra and Lancartama Sejati
The main advantage of trading using opposite Diamond Citra and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Citra position performs unexpectedly, Lancartama Sejati 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 Lancartama Sejati will offset losses from the drop in Lancartama Sejati's long position.| Diamond Citra vs. Perintis Triniti Properti | Diamond Citra vs. Satria Mega Kencana | Diamond Citra vs. Sunindo Adipersada Tbk | Diamond Citra vs. Jaya Sukses Makmur |
| Lancartama Sejati vs. Perintis Triniti Properti | Lancartama Sejati vs. Diamond Citra Propertindo | Lancartama Sejati vs. Karya Bersama Anugerah | Lancartama Sejati vs. Pratama Widya Tbk |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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