Correlation Between Ladangbaja Murni and Saraswanti Anugerah
Can any of the company-specific risk be diversified away by investing in both Ladangbaja Murni and Saraswanti Anugerah 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 Ladangbaja Murni and Saraswanti Anugerah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladangbaja Murni PT and Saraswanti Anugerah Makmur, you can compare the effects of market volatilities on Ladangbaja Murni and Saraswanti Anugerah 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 Ladangbaja Murni with a short position of Saraswanti Anugerah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladangbaja Murni and Saraswanti Anugerah.
Diversification Opportunities for Ladangbaja Murni and Saraswanti Anugerah
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ladangbaja and Saraswanti is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ladangbaja Murni PT and Saraswanti Anugerah Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saraswanti Anugerah and Ladangbaja Murni 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 Ladangbaja Murni PT are associated (or correlated) with Saraswanti Anugerah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saraswanti Anugerah has no effect on the direction of Ladangbaja Murni i.e., Ladangbaja Murni and Saraswanti Anugerah go up and down completely randomly.
Pair Corralation between Ladangbaja Murni and Saraswanti Anugerah
Assuming the 90 days trading horizon Ladangbaja Murni PT is expected to generate 6.56 times more return on investment than Saraswanti Anugerah. However, Ladangbaja Murni is 6.56 times more volatile than Saraswanti Anugerah Makmur. It trades about 0.08 of its potential returns per unit of risk. Saraswanti Anugerah Makmur is currently generating about 0.12 per unit of risk. If you would invest 19,500 in Ladangbaja Murni PT on September 5, 2024 and sell it today you would earn a total of 9,700 from holding Ladangbaja Murni PT or generate 49.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ladangbaja Murni PT vs. Saraswanti Anugerah Makmur
Performance |
| Timeline |
| Ladangbaja Murni |
| Saraswanti Anugerah |
Ladangbaja Murni and Saraswanti Anugerah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladangbaja Murni and Saraswanti Anugerah
The main advantage of trading using opposite Ladangbaja Murni and Saraswanti Anugerah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladangbaja Murni position performs unexpectedly, Saraswanti Anugerah 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 Saraswanti Anugerah will offset losses from the drop in Saraswanti Anugerah's long position.| Ladangbaja Murni vs. Gunawan Dianjaya Steel | Ladangbaja Murni vs. Steel Pipe Industry | Ladangbaja Murni vs. Ifishdeco PT | Ladangbaja Murni vs. Saraswanti Anugerah Makmur |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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