Correlation Between Lautan Luas and Panorama Sentrawisata
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and Panorama Sentrawisata 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 Panorama Sentrawisata 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 Panorama Sentrawisata Tbk, you can compare the effects of market volatilities on Lautan Luas and Panorama Sentrawisata 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 Panorama Sentrawisata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and Panorama Sentrawisata.
Diversification Opportunities for Lautan Luas and Panorama Sentrawisata
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lautan and Panorama is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and Panorama Sentrawisata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panorama Sentrawisata Tbk 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 Panorama Sentrawisata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panorama Sentrawisata Tbk has no effect on the direction of Lautan Luas i.e., Lautan Luas and Panorama Sentrawisata go up and down completely randomly.
Pair Corralation between Lautan Luas and Panorama Sentrawisata
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to generate 0.77 times more return on investment than Panorama Sentrawisata. However, Lautan Luas Tbk is 1.3 times less risky than Panorama Sentrawisata. It trades about -0.02 of its potential returns per unit of risk. Panorama Sentrawisata Tbk is currently generating about -0.05 per unit of risk. If you would invest 110,493 in Lautan Luas Tbk on August 29, 2024 and sell it today you would lose (10,493) from holding Lautan Luas Tbk or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Lautan Luas Tbk vs. Panorama Sentrawisata Tbk
Performance |
| Timeline |
| Lautan Luas Tbk |
| Panorama Sentrawisata Tbk |
Lautan Luas and Panorama Sentrawisata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and Panorama Sentrawisata
The main advantage of trading using opposite Lautan Luas and Panorama Sentrawisata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, Panorama Sentrawisata 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 Panorama Sentrawisata will offset losses from the drop in Panorama Sentrawisata's long position.| Lautan Luas vs. Dharma Polimetal Tbk | Lautan Luas vs. Alumindo Light Metal | Lautan Luas vs. Communication Cable Systems | Lautan Luas vs. Tridomain Performance Materials |
| Panorama Sentrawisata vs. Pembangunan Jaya Ancol | Panorama Sentrawisata vs. Hotel Sahid Jaya | Panorama Sentrawisata vs. Pudjiadi Sons Tbk | Panorama Sentrawisata vs. Pioneerindo Gourmet 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 Stocks Directory module to find actively traded stocks across global markets.
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