Correlation Between Leyand International and Cipta Selera
Can any of the company-specific risk be diversified away by investing in both Leyand International and Cipta Selera 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 Leyand International and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leyand International Tbk and Cipta Selera Murni, you can compare the effects of market volatilities on Leyand International and Cipta Selera 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 Leyand International with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyand International and Cipta Selera.
Diversification Opportunities for Leyand International and Cipta Selera
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leyand and Cipta is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Leyand International Tbk and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and Leyand International 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 Leyand International Tbk are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Leyand International i.e., Leyand International and Cipta Selera go up and down completely randomly.
Pair Corralation between Leyand International and Cipta Selera
Assuming the 90 days trading horizon Leyand International Tbk is expected to generate 2.42 times more return on investment than Cipta Selera. However, Leyand International is 2.42 times more volatile than Cipta Selera Murni. It trades about 0.15 of its potential returns per unit of risk. Cipta Selera Murni is currently generating about 0.05 per unit of risk. If you would invest 1,900 in Leyand International Tbk on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Leyand International Tbk or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Leyand International Tbk vs. Cipta Selera Murni
Performance |
| Timeline |
| Leyand International Tbk |
| Cipta Selera Murni |
Leyand International and Cipta Selera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyand International and Cipta Selera
The main advantage of trading using opposite Leyand International and Cipta Selera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyand International position performs unexpectedly, Cipta Selera 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 Cipta Selera will offset losses from the drop in Cipta Selera's long position.| Leyand International vs. Tera Data Indonusa | Leyand International vs. Indorama Synthetics Tbk | Leyand International vs. Trinitan Metals and | Leyand International vs. Metrodata Electronics Tbk |
| Cipta Selera vs. Galva Technologies Tbk | Cipta Selera vs. Fast Food Indonesia | Cipta Selera vs. PT Indofood Sukses | Cipta Selera vs. Diamond Food Indonesia |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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