Correlation Between Langgeng Makmur and Cashlez Worldwide
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Cashlez Worldwide 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 Cashlez Worldwide 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 Cashlez Worldwide Indonesia, you can compare the effects of market volatilities on Langgeng Makmur and Cashlez Worldwide 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 Cashlez Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Cashlez Worldwide.
Diversification Opportunities for Langgeng Makmur and Cashlez Worldwide
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Langgeng and Cashlez is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Cashlez Worldwide Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashlez Worldwide 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 Cashlez Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashlez Worldwide has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Cashlez Worldwide go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Cashlez Worldwide
Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 1.41 times more return on investment than Cashlez Worldwide. However, Langgeng Makmur is 1.41 times more volatile than Cashlez Worldwide Indonesia. It trades about 0.05 of its potential returns per unit of risk. Cashlez Worldwide Indonesia is currently generating about -0.07 per unit of risk. If you would invest 11,400 in Langgeng Makmur Industri on September 4, 2024 and sell it today you would earn a total of 4,200 from holding Langgeng Makmur Industri or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Cashlez Worldwide Indonesia
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Cashlez Worldwide |
Langgeng Makmur and Cashlez Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Cashlez Worldwide
The main advantage of trading using opposite Langgeng Makmur and Cashlez Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Cashlez Worldwide 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 Cashlez Worldwide will offset losses from the drop in Cashlez Worldwide'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 |
| Cashlez Worldwide vs. Digital Mediatama Maxima | Cashlez Worldwide vs. Hensel Davest Indonesia | Cashlez Worldwide vs. Kioson Komersial Indonesia | Cashlez Worldwide vs. Anabatic Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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