Correlation Between Ramayana Lestari and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Ramayana Lestari and Matahari Department 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 Ramayana Lestari and Matahari Department into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramayana Lestari Sentosa and Matahari Department Store, you can compare the effects of market volatilities on Ramayana Lestari and Matahari Department 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 Ramayana Lestari with a short position of Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramayana Lestari and Matahari Department.
Diversification Opportunities for Ramayana Lestari and Matahari Department
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ramayana and Matahari is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ramayana Lestari Sentosa and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store and Ramayana Lestari 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 Ramayana Lestari Sentosa are associated (or correlated) with Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Ramayana Lestari i.e., Ramayana Lestari and Matahari Department go up and down completely randomly.
Pair Corralation between Ramayana Lestari and Matahari Department
Assuming the 90 days trading horizon Ramayana Lestari Sentosa is expected to generate 0.61 times more return on investment than Matahari Department. However, Ramayana Lestari Sentosa is 1.63 times less risky than Matahari Department. It trades about -0.06 of its potential returns per unit of risk. Matahari Department Store is currently generating about -0.07 per unit of risk. If you would invest 57,849 in Ramayana Lestari Sentosa on November 5, 2024 and sell it today you would lose (21,649) from holding Ramayana Lestari Sentosa or give up 37.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramayana Lestari Sentosa vs. Matahari Department Store
Performance |
| Timeline |
| Ramayana Lestari Sentosa |
| Matahari Department Store |
Ramayana Lestari and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramayana Lestari and Matahari Department
The main advantage of trading using opposite Ramayana Lestari and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramayana Lestari position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department's long position.| Ramayana Lestari vs. Mitra Adiperkasa Tbk | Ramayana Lestari vs. Matahari Putra Prima | Ramayana Lestari vs. Summarecon Agung Tbk | Ramayana Lestari vs. Ciputra Development Tbk |
| Matahari Department vs. Surya Citra Media | Matahari Department vs. Akr Corporindo Tbk | Matahari Department vs. Media Nusantara Citra | Matahari Department vs. Pembangunan Perumahan PT |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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