Correlation Between Langgeng Makmur and Colorpak Indonesia
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Colorpak Indonesia 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 Colorpak Indonesia 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 Colorpak Indonesia Tbk, you can compare the effects of market volatilities on Langgeng Makmur and Colorpak Indonesia 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 Colorpak Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Colorpak Indonesia.
Diversification Opportunities for Langgeng Makmur and Colorpak Indonesia
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Langgeng and Colorpak is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Colorpak Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colorpak Indonesia Tbk 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 Colorpak Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colorpak Indonesia Tbk has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Colorpak Indonesia go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Colorpak Indonesia
Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 25.4 times more return on investment than Colorpak Indonesia. However, Langgeng Makmur is 25.4 times more volatile than Colorpak Indonesia Tbk. It trades about 0.12 of its potential returns per unit of risk. Colorpak Indonesia Tbk is currently generating about -0.24 per unit of risk. If you would invest 11,600 in Langgeng Makmur Industri on September 1, 2024 and sell it today you would earn a total of 2,200 from holding Langgeng Makmur Industri or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Colorpak Indonesia Tbk
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Colorpak Indonesia Tbk |
Langgeng Makmur and Colorpak Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Colorpak Indonesia
The main advantage of trading using opposite Langgeng Makmur and Colorpak Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Colorpak Indonesia 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 Colorpak Indonesia will offset losses from the drop in Colorpak Indonesia'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 |
| Colorpak Indonesia vs. Perusahaan Gas Negara | Colorpak Indonesia vs. Telkom Indonesia Tbk | Colorpak Indonesia vs. Mitra Pinasthika Mustika | Colorpak Indonesia vs. Jakarta Int Hotels |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |