Correlation Between Pembangunan Jaya and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both Pembangunan Jaya and Lautan Luas 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 Pembangunan Jaya and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembangunan Jaya Ancol and Lautan Luas Tbk, you can compare the effects of market volatilities on Pembangunan Jaya and Lautan Luas 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 Pembangunan Jaya with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembangunan Jaya and Lautan Luas.
Diversification Opportunities for Pembangunan Jaya and Lautan Luas
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pembangunan and Lautan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Jaya Ancol and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas Tbk and Pembangunan Jaya 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 Pembangunan Jaya Ancol are associated (or correlated) with Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of Pembangunan Jaya i.e., Pembangunan Jaya and Lautan Luas go up and down completely randomly.
Pair Corralation between Pembangunan Jaya and Lautan Luas
Assuming the 90 days trading horizon Pembangunan Jaya Ancol is expected to under-perform the Lautan Luas. But the stock apears to be less risky and, when comparing its historical volatility, Pembangunan Jaya Ancol is 1.33 times less risky than Lautan Luas. The stock trades about -0.28 of its potential returns per unit of risk. The Lautan Luas Tbk is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 101,000 in Lautan Luas Tbk on August 26, 2024 and sell it today you would lose (1,000.00) from holding Lautan Luas Tbk or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembangunan Jaya Ancol vs. Lautan Luas Tbk
Performance |
| Timeline |
| Pembangunan Jaya Ancol |
| Lautan Luas Tbk |
Pembangunan Jaya and Lautan Luas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembangunan Jaya and Lautan Luas
The main advantage of trading using opposite Pembangunan Jaya and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembangunan Jaya position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.| Pembangunan Jaya vs. Lautan Luas Tbk | Pembangunan Jaya vs. Panorama Sentrawisata Tbk | Pembangunan Jaya vs. Multi Indocitra Tbk | Pembangunan Jaya vs. Hotel Sahid Jaya |
| Lautan Luas vs. Ciptadana Asset Management | Lautan Luas vs. Bank Ocbc Nisp | Lautan Luas vs. PT Charlie Hospital | Lautan Luas vs. Nanotech Indonesia Global |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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