Correlation Between Dharma Polimetal and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Dharma Polimetal 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 Dharma Polimetal and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dharma Polimetal Tbk and Lautan Luas Tbk, you can compare the effects of market volatilities on Dharma Polimetal 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 Dharma Polimetal with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dharma Polimetal and Lautan Luas.
Diversification Opportunities for Dharma Polimetal and Lautan Luas
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dharma and Lautan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dharma Polimetal Tbk 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 Dharma Polimetal 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 Dharma Polimetal Tbk 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 Dharma Polimetal i.e., Dharma Polimetal and Lautan Luas go up and down completely randomly.
Pair Corralation between Dharma Polimetal and Lautan Luas
Assuming the 90 days trading horizon Dharma Polimetal Tbk is expected to under-perform the Lautan Luas. In addition to that, Dharma Polimetal is 1.89 times more volatile than Lautan Luas Tbk. It trades about -0.02 of its total potential returns per unit of risk. Lautan Luas Tbk is currently generating about 0.0 per unit of volatility. If you would invest 106,633 in Lautan Luas Tbk on August 28, 2024 and sell it today you would lose (6,133) from holding Lautan Luas Tbk or give up 5.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Dharma Polimetal Tbk vs. Lautan Luas Tbk
Performance |
| Timeline |
| Dharma Polimetal Tbk |
| Lautan Luas Tbk |
Dharma Polimetal and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dharma Polimetal and Lautan Luas
The main advantage of trading using opposite Dharma Polimetal and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dharma Polimetal 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.| Dharma Polimetal vs. Triputra Agro Persada | Dharma Polimetal vs. Autopedia Sukses Lestari | Dharma Polimetal vs. Cisarua Mountain Dairy | Dharma Polimetal vs. Surya Esa Perkasa |
| Lautan Luas vs. Kedaung Indah Can | Lautan Luas vs. Langgeng Makmur Industri | Lautan Luas vs. Kabelindo Murni Tbk | Lautan Luas vs. Mustika Ratu 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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