Correlation Between Langgeng Makmur and Chandra Asri
Can any of the company-specific risk be diversified away by investing in both Langgeng Makmur and Chandra Asri 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 Chandra Asri 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 Chandra Asri Petrochemical, you can compare the effects of market volatilities on Langgeng Makmur and Chandra Asri 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 Chandra Asri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Chandra Asri.
Diversification Opportunities for Langgeng Makmur and Chandra Asri
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Langgeng and Chandra is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Chandra Asri Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chandra Asri Petroch 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 Chandra Asri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chandra Asri Petroch has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Chandra Asri go up and down completely randomly.
Pair Corralation between Langgeng Makmur and Chandra Asri
Assuming the 90 days trading horizon Langgeng Makmur is expected to generate 2.19 times less return on investment than Chandra Asri. In addition to that, Langgeng Makmur is 1.12 times more volatile than Chandra Asri Petrochemical. It trades about 0.03 of its total potential returns per unit of risk. Chandra Asri Petrochemical is currently generating about 0.08 per unit of volatility. If you would invest 235,278 in Chandra Asri Petrochemical on August 28, 2024 and sell it today you would earn a total of 462,222 from holding Chandra Asri Petrochemical or generate 196.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Langgeng Makmur Industri vs. Chandra Asri Petrochemical
Performance |
| Timeline |
| Langgeng Makmur Industri |
| Chandra Asri Petroch |
Langgeng Makmur and Chandra Asri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Langgeng Makmur and Chandra Asri
The main advantage of trading using opposite Langgeng Makmur and Chandra Asri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Langgeng Makmur position performs unexpectedly, Chandra Asri 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 Chandra Asri will offset losses from the drop in Chandra Asri'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 |
| Chandra Asri vs. Barito Pacific Tbk | Chandra Asri vs. Pabrik Kertas Tjiwi | Chandra Asri vs. Charoen Pokphand Indonesia | Chandra Asri vs. Indah Kiat Pulp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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