Correlation Between Matahari Putra and Ramayana Lestari
Can any of the company-specific risk be diversified away by investing in both Matahari Putra and Ramayana Lestari 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 Matahari Putra and Ramayana Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Putra Prima and Ramayana Lestari Sentosa, you can compare the effects of market volatilities on Matahari Putra and Ramayana Lestari 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 Matahari Putra with a short position of Ramayana Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Putra and Ramayana Lestari.
Diversification Opportunities for Matahari Putra and Ramayana Lestari
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matahari and Ramayana is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Putra Prima and Ramayana Lestari Sentosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramayana Lestari Sentosa and Matahari Putra 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 Matahari Putra Prima are associated (or correlated) with Ramayana Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramayana Lestari Sentosa has no effect on the direction of Matahari Putra i.e., Matahari Putra and Ramayana Lestari go up and down completely randomly.
Pair Corralation between Matahari Putra and Ramayana Lestari
Assuming the 90 days trading horizon Matahari Putra Prima is expected to under-perform the Ramayana Lestari. In addition to that, Matahari Putra is 5.24 times more volatile than Ramayana Lestari Sentosa. It trades about -0.02 of its total potential returns per unit of risk. Ramayana Lestari Sentosa is currently generating about 0.08 per unit of volatility. If you would invest 36,200 in Ramayana Lestari Sentosa on October 26, 2024 and sell it today you would earn a total of 400.00 from holding Ramayana Lestari Sentosa or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matahari Putra Prima vs. Ramayana Lestari Sentosa
Performance |
| Timeline |
| Matahari Putra Prima |
| Ramayana Lestari Sentosa |
Matahari Putra and Ramayana Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Putra and Ramayana Lestari
The main advantage of trading using opposite Matahari Putra and Ramayana Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Putra position performs unexpectedly, Ramayana Lestari 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 Ramayana Lestari will offset losses from the drop in Ramayana Lestari's long position.| Matahari Putra vs. Multipolar Tbk | Matahari Putra vs. Ramayana Lestari Sentosa | Matahari Putra vs. Lippo Karawaci Tbk | Matahari Putra vs. Mitra Adiperkasa Tbk |
| Ramayana Lestari vs. Mitra Adiperkasa Tbk | Ramayana Lestari vs. Matahari Putra Prima | Ramayana Lestari vs. Summarecon Agung Tbk | Ramayana Lestari vs. Ciputra Development 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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