Correlation Between Lautan Luas and Siloam International
Can any of the company-specific risk be diversified away by investing in both Lautan Luas and Siloam International 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 Siloam International 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 Siloam International Hospitals, you can compare the effects of market volatilities on Lautan Luas and Siloam International 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 Siloam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lautan Luas and Siloam International.
Diversification Opportunities for Lautan Luas and Siloam International
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lautan and Siloam is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lautan Luas Tbk and Siloam International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siloam International 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 Siloam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siloam International has no effect on the direction of Lautan Luas i.e., Lautan Luas and Siloam International go up and down completely randomly.
Pair Corralation between Lautan Luas and Siloam International
Assuming the 90 days trading horizon Lautan Luas Tbk is expected to under-perform the Siloam International. But the stock apears to be less risky and, when comparing its historical volatility, Lautan Luas Tbk is 2.48 times less risky than Siloam International. The stock trades about -0.04 of its potential returns per unit of risk. The Siloam International Hospitals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 222,243 in Siloam International Hospitals on November 5, 2024 and sell it today you would earn a total of 77,757 from holding Siloam International Hospitals or generate 34.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lautan Luas Tbk vs. Siloam International Hospitals
Performance |
| Timeline |
| Lautan Luas Tbk |
| Siloam International |
Lautan Luas and Siloam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lautan Luas and Siloam International
The main advantage of trading using opposite Lautan Luas and Siloam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lautan Luas position performs unexpectedly, Siloam International 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 Siloam International will offset losses from the drop in Siloam International's long position.| Lautan Luas vs. Pertamina Geothermal Energy | Lautan Luas vs. Garuda Metalindo Tbk | Lautan Luas vs. Equity Development Investment | Lautan Luas vs. Trinitan Metals and |
| Siloam International vs. Mitra Keluarga Karyasehat | Siloam International vs. Matahari Department Store | Siloam International vs. Surya Citra Media | Siloam International vs. Sawit Sumbermas Sarana |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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