Correlation Between Leyand International and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Leyand International and Protech Mitra 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 Protech Mitra 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 Protech Mitra Perkasa, you can compare the effects of market volatilities on Leyand International and Protech Mitra 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 Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyand International and Protech Mitra.
Diversification Opportunities for Leyand International and Protech Mitra
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leyand and Protech is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Leyand International Tbk and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa 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 Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Leyand International i.e., Leyand International and Protech Mitra go up and down completely randomly.
Pair Corralation between Leyand International and Protech Mitra
Assuming the 90 days trading horizon Leyand International Tbk is expected to generate 2.41 times more return on investment than Protech Mitra. However, Leyand International is 2.41 times more volatile than Protech Mitra Perkasa. It trades about 0.04 of its potential returns per unit of risk. Protech Mitra Perkasa is currently generating about 0.03 per unit of risk. If you would invest 1,600 in Leyand International Tbk on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Leyand International Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.61% |
| Values | Daily Returns |
Leyand International Tbk vs. Protech Mitra Perkasa
Performance |
| Timeline |
| Leyand International Tbk |
| Protech Mitra Perkasa |
Leyand International and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyand International and Protech Mitra
The main advantage of trading using opposite Leyand International and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyand International position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.| Leyand International vs. Protech Mitra Perkasa | Leyand International vs. Alumindo Light Metal | Leyand International vs. Trinitan Metals and | Leyand International vs. Optima Prima Metal |
| Protech Mitra vs. PT Indonesia Kendaraan | Protech Mitra vs. Surya Toto Indonesia | Protech Mitra vs. Mitra Pinasthika Mustika | Protech Mitra vs. Integra Indocabinet 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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