Correlation Between Langgeng Makmur and Graha Layar
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Graha Layar 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 Langgeng Makmur and Graha Layar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Langgeng Makmur Industri and Graha Layar Prima, you can compare the effects of market volatilities on Langgeng Makmur and Graha Layar 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 Langgeng Makmur with a short position of Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Graha Layar.
Diversification Opportunities for Langgeng Makmur and Graha Layar
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Langgeng and Graha is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima and Langgeng Makmur 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 Langgeng Makmur Industri are associated (or correlated) with Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Graha Layar go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Graha Layar
Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 8.26 times more return on investment than Graha Layar. However, Langgeng Makmur is 8.26 times more volatile than Graha Layar Prima. It trades about 0.17 of its potential returns per unit of risk. Graha Layar Prima is currently generating about -0.31 per unit of risk. If you would invest 11,400 in Langgeng Makmur Industri on August 30, 2024 and sell it today you would earn a total of 4,000 from holding Langgeng Makmur Industri or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Graha Layar Prima
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Graha Layar Prima |
Langgeng Makmur and Graha Layar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Graha Layar
The main advantage of trading using opposite Langgeng Makmur and Graha Layar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Graha Layar 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 Graha Layar will offset losses from the drop in Graha Layar's long position.| Langgeng Makmur vs. Kedaung Indah Can | Langgeng Makmur vs. Kedawung Setia Industrial | Langgeng Makmur vs. Mustika Ratu Tbk | Langgeng Makmur vs. Pyridam Farma Tbk |
| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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