Correlation Between Lautan Luas and Intikeramik Alamasri
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and Intikeramik Alamasri 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 Lautan Luas and Intikeramik Alamasri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lautan Luas Tbk and Intikeramik Alamasri Industri, you can compare the effects of market volatilities on Lautan Luas and Intikeramik Alamasri 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 Lautan Luas with a short position of Intikeramik Alamasri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and Intikeramik Alamasri.
Diversification Opportunities for Lautan Luas and Intikeramik Alamasri
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lautan and Intikeramik is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and Intikeramik Alamasri Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intikeramik Alamasri and Lautan Luas 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 Lautan Luas Tbk are associated (or correlated) with Intikeramik Alamasri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intikeramik Alamasri has no effect on the direction of Lautan Luas i.e., Lautan Luas and Intikeramik Alamasri go up and down completely randomly.
Pair Corralation between Lautan Luas and Intikeramik Alamasri
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to generate 0.28 times more return on investment than Intikeramik Alamasri. However, Lautan Luas Tbk is 3.59 times less risky than Intikeramik Alamasri. It trades about 0.0 of its potential returns per unit of risk. Intikeramik Alamasri Industri is currently generating about -0.05 per unit of risk. If you would invest 106,633 in Lautan Luas Tbk on August 28, 2024 and sell it today you would lose (6,133) from holding Lautan Luas Tbk or give up 5.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Lautan Luas Tbk vs. Intikeramik Alamasri Industri
Performance |
| Timeline |
| Lautan Luas Tbk |
| Intikeramik Alamasri |
Lautan Luas and Intikeramik Alamasri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and Intikeramik Alamasri
The main advantage of trading using opposite Lautan Luas and Intikeramik Alamasri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, Intikeramik Alamasri 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 Intikeramik Alamasri will offset losses from the drop in Intikeramik Alamasri's long position.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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