Correlation Between Lautan Luas and M Cash
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and M Cash 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 M Cash 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 M Cash Integrasi, you can compare the effects of market volatilities on Lautan Luas and M Cash 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 M Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and M Cash.
Diversification Opportunities for Lautan Luas and M Cash
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lautan and MCAS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and M Cash Integrasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Cash Integrasi 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 M Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Cash Integrasi has no effect on the direction of Lautan Luas i.e., Lautan Luas and M Cash go up and down completely randomly.
Pair Corralation between Lautan Luas and M Cash
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to generate 0.33 times more return on investment than M Cash. However, Lautan Luas Tbk is 3.07 times less risky than M Cash. It trades about 0.02 of its potential returns per unit of risk. M Cash Integrasi is currently generating about -0.1 per unit of risk. If you would invest 96,500 in Lautan Luas Tbk on September 12, 2024 and sell it today you would earn a total of 4,500 from holding Lautan Luas Tbk or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lautan Luas Tbk vs. M Cash Integrasi
Performance |
| Timeline |
| Lautan Luas Tbk |
| M Cash Integrasi |
Lautan Luas and M Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and M Cash
The main advantage of trading using opposite Lautan Luas and M Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, M Cash 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 M Cash will offset losses from the drop in M Cash's long position.| Lautan Luas vs. PT Indofood Sukses | Lautan Luas vs. Eastparc Hotel Tbk | Lautan Luas vs. Fast Food Indonesia | Lautan Luas vs. HK Metals Utama |
| M Cash vs. Multipolar Tbk | M Cash vs. Astra Graphia Tbk | M Cash vs. Ramayana Lestari Sentosa | M Cash vs. Lautan Luas 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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