Correlation Between Lautan Luas and Ancora Indonesia
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and Ancora Indonesia 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 Ancora Indonesia 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 Ancora Indonesia Resources, you can compare the effects of market volatilities on Lautan Luas and Ancora Indonesia 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 Ancora Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and Ancora Indonesia.
Diversification Opportunities for Lautan Luas and Ancora Indonesia
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lautan and Ancora is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and Ancora Indonesia Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora Indonesia Res 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 Ancora Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora Indonesia Res has no effect on the direction of Lautan Luas i.e., Lautan Luas and Ancora Indonesia go up and down completely randomly.
Pair Corralation between Lautan Luas and Ancora Indonesia
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to under-perform the Ancora Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Lautan Luas Tbk is 5.35 times less risky than Ancora Indonesia. The stock trades about -0.16 of its potential returns per unit of risk. The Ancora Indonesia Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,900 in Ancora Indonesia Resources on November 19, 2024 and sell it today you would earn a total of 0.00 from holding Ancora Indonesia Resources or generate 0.0% 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. Ancora Indonesia Resources
Performance |
| Timeline |
| Lautan Luas Tbk |
| Ancora Indonesia Res |
Lautan Luas and Ancora Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and Ancora Indonesia
The main advantage of trading using opposite Lautan Luas and Ancora Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, Ancora Indonesia 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 Ancora Indonesia will offset losses from the drop in Ancora Indonesia's long position.| Lautan Luas vs. Inocycle Technology Tbk | Lautan Luas vs. Lippo General Insurance | Lautan Luas vs. City Retail Developments | Lautan Luas vs. Alumindo Light Metal |
| Ancora Indonesia vs. Lautan Luas Tbk | Ancora Indonesia vs. Multi Indocitra Tbk | Ancora Indonesia vs. Pembangunan Graha Lestari | Ancora Indonesia vs. Millennium Pharmacon International |
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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