Correlation Between Langgeng Makmur and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Lautan Luas 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 Lautan Luas 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 Lautan Luas Tbk, you can compare the effects of market volatilities on Langgeng Makmur and Lautan Luas 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 Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Lautan Luas.
Diversification Opportunities for Langgeng Makmur and Lautan Luas
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Langgeng and Lautan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas 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 Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Lautan Luas go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Lautan Luas
Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 4.16 times more return on investment than Lautan Luas. However, Langgeng Makmur is 4.16 times more volatile than Lautan Luas Tbk. It trades about 0.05 of its potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.01 per unit of risk. If you would invest 11,800 in Langgeng Makmur Industri on August 26, 2024 and sell it today you would earn a total of 6,400 from holding Langgeng Makmur Industri or generate 54.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Lautan Luas Tbk
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Lautan Luas Tbk |
Langgeng Makmur and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Lautan Luas
The main advantage of trading using opposite Langgeng Makmur and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' 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 |
| Lautan Luas vs. Kedaung Indah Can | Lautan Luas vs. Langgeng Makmur Industri | Lautan Luas vs. Kabelindo Murni Tbk | Lautan Luas vs. Mustika Ratu 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |