Correlation Between PT Data and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both PT Data and Lotte Chemical 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 Data and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Data Sinergitama and Lotte Chemical Titan, you can compare the effects of market volatilities on PT Data and Lotte Chemical 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 Data with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Lotte Chemical.
Diversification Opportunities for PT Data and Lotte Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ELIT and Lotte is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan and PT Data 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 Data Sinergitama are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Titan has no effect on the direction of PT Data i.e., PT Data and Lotte Chemical go up and down completely randomly.
Pair Corralation between PT Data and Lotte Chemical
Assuming the 90 days trading horizon PT Data Sinergitama is expected to generate 1.75 times more return on investment than Lotte Chemical. However, PT Data is 1.75 times more volatile than Lotte Chemical Titan. It trades about 0.19 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.06 per unit of risk. If you would invest 11,500 in PT Data Sinergitama on October 26, 2024 and sell it today you would earn a total of 1,100 from holding PT Data Sinergitama or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Data Sinergitama vs. Lotte Chemical Titan
Performance |
| Timeline |
| PT Data Sinergitama |
| Lotte Chemical Titan |
PT Data and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Data and Lotte Chemical
The main advantage of trading using opposite PT Data and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Data position performs unexpectedly, Lotte Chemical 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| PT Data vs. Victoria Insurance Tbk | PT Data vs. Lippo General Insurance | PT Data vs. PT UBC Medical | PT Data vs. Dharma Polimetal Tbk |
| Lotte Chemical vs. Asiaplast Industries Tbk | Lotte Chemical vs. Argha Karya Prima | Lotte Chemical vs. Indal Aluminium Industry | Lotte Chemical vs. Alakasa Industrindo 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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