Correlation Between Langgeng Makmur and Wahana Inti
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Wahana Inti 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 Wahana Inti 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 Wahana Inti MakmurTbk, you can compare the effects of market volatilities on Langgeng Makmur and Wahana Inti 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 Wahana Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Wahana Inti.
Diversification Opportunities for Langgeng Makmur and Wahana Inti
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Langgeng and Wahana is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Wahana Inti MakmurTbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Inti MakmurTbk 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 Wahana Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Inti MakmurTbk has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Wahana Inti go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Wahana Inti
Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 4.14 times more return on investment than Wahana Inti. However, Langgeng Makmur is 4.14 times more volatile than Wahana Inti MakmurTbk. It trades about 0.19 of its potential returns per unit of risk. Wahana Inti MakmurTbk is currently generating about 0.01 per unit of risk. If you would invest 11,000 in Langgeng Makmur Industri on September 4, 2024 and sell it today you would earn a total of 4,600 from holding Langgeng Makmur Industri or generate 41.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Wahana Inti MakmurTbk
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Wahana Inti MakmurTbk |
Langgeng Makmur and Wahana Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Wahana Inti
The main advantage of trading using opposite Langgeng Makmur and Wahana Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Wahana Inti 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 Wahana Inti will offset losses from the drop in Wahana Inti'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 |
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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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