Correlation Between Lautan Luas and Prodia Widyahusada
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and Prodia Widyahusada 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 Prodia Widyahusada 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 Prodia Widyahusada Tbk, you can compare the effects of market volatilities on Lautan Luas and Prodia Widyahusada 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 Prodia Widyahusada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and Prodia Widyahusada.
Diversification Opportunities for Lautan Luas and Prodia Widyahusada
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lautan and Prodia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and Prodia Widyahusada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodia Widyahusada 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 Prodia Widyahusada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodia Widyahusada Tbk has no effect on the direction of Lautan Luas i.e., Lautan Luas and Prodia Widyahusada go up and down completely randomly.
Pair Corralation between Lautan Luas and Prodia Widyahusada
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to generate 0.52 times more return on investment than Prodia Widyahusada. However, Lautan Luas Tbk is 1.92 times less risky than Prodia Widyahusada. It trades about 0.01 of its potential returns per unit of risk. Prodia Widyahusada Tbk is currently generating about -0.04 per unit of risk. If you would invest 100,000 in Lautan Luas Tbk on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Lautan Luas Tbk 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. Prodia Widyahusada Tbk
Performance |
| Timeline |
| Lautan Luas Tbk |
| Prodia Widyahusada Tbk |
Lautan Luas and Prodia Widyahusada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and Prodia Widyahusada
The main advantage of trading using opposite Lautan Luas and Prodia Widyahusada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, Prodia Widyahusada 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 Prodia Widyahusada will offset losses from the drop in Prodia Widyahusada's long position.| Lautan Luas vs. Ciptadana Asset Management | Lautan Luas vs. Bank Ocbc Nisp | Lautan Luas vs. PT Charlie Hospital | Lautan Luas vs. Nanotech Indonesia Global |
| Prodia Widyahusada vs. Astra Graphia Tbk | Prodia Widyahusada vs. Hexindo Adiperkasa Tbk | Prodia Widyahusada vs. Lautan Luas Tbk | Prodia Widyahusada vs. Citra Marga Nusaphala |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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