Correlation Between Prima Globalindo and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Prima Globalindo and Lancartama Sejati 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 Prima Globalindo and Lancartama Sejati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prima Globalindo Logistik and Lancartama Sejati Tbk, you can compare the effects of market volatilities on Prima Globalindo and Lancartama Sejati 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 Prima Globalindo with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prima Globalindo and Lancartama Sejati.
Diversification Opportunities for Prima Globalindo and Lancartama Sejati
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prima and Lancartama is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Prima Globalindo Logistik and Lancartama Sejati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancartama Sejati Tbk and Prima Globalindo 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 Prima Globalindo Logistik are associated (or correlated) with Lancartama Sejati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancartama Sejati Tbk has no effect on the direction of Prima Globalindo i.e., Prima Globalindo and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Prima Globalindo and Lancartama Sejati
Assuming the 90 days trading horizon Prima Globalindo Logistik is expected to under-perform the Lancartama Sejati. But the stock apears to be less risky and, when comparing its historical volatility, Prima Globalindo Logistik is 3.07 times less risky than Lancartama Sejati. The stock trades about -0.15 of its potential returns per unit of risk. The Lancartama Sejati Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Lancartama Sejati Tbk on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Lancartama Sejati Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prima Globalindo Logistik vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Prima Globalindo Logistik |
| Lancartama Sejati Tbk |
Prima Globalindo and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prima Globalindo and Lancartama Sejati
The main advantage of trading using opposite Prima Globalindo and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prima Globalindo position performs unexpectedly, Lancartama Sejati 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 Lancartama Sejati will offset losses from the drop in Lancartama Sejati's long position.| Prima Globalindo vs. Pelita Samudera Shipping | Prima Globalindo vs. Cisadane Sawit Raya | Prima Globalindo vs. Hartadinata Abadi Tbk | Prima Globalindo vs. Mitrabara Adiperdana PT |
| Lancartama Sejati vs. Perintis Triniti Properti | Lancartama Sejati vs. Diamond Citra Propertindo | Lancartama Sejati vs. Karya Bersama Anugerah | Lancartama Sejati vs. Pratama Widya 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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