Correlation Between Ramayana Lestari and Matahari Putra
Can any of the company-specific risk be diversified away by investing in both Ramayana Lestari and Matahari Putra 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 Putra 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 Putra Prima, you can compare the effects of market volatilities on Ramayana Lestari and Matahari Putra 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 Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramayana Lestari and Matahari Putra.
Diversification Opportunities for Ramayana Lestari and Matahari Putra
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramayana and Matahari is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ramayana Lestari Sentosa and Matahari Putra Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Putra Prima 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 Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Putra Prima has no effect on the direction of Ramayana Lestari i.e., Ramayana Lestari and Matahari Putra go up and down completely randomly.
Pair Corralation between Ramayana Lestari and Matahari Putra
Assuming the 90 days trading horizon Ramayana Lestari Sentosa is expected to under-perform the Matahari Putra. But the stock apears to be less risky and, when comparing its historical volatility, Ramayana Lestari Sentosa is 3.16 times less risky than Matahari Putra. The stock trades about -0.05 of its potential returns per unit of risk. The Matahari Putra Prima is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Matahari Putra Prima on November 5, 2024 and sell it today you would earn a total of 1,300 from holding Matahari Putra Prima or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramayana Lestari Sentosa vs. Matahari Putra Prima
Performance |
| Timeline |
| Ramayana Lestari Sentosa |
| Matahari Putra Prima |
Ramayana Lestari and Matahari Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramayana Lestari and Matahari Putra
The main advantage of trading using opposite Ramayana Lestari and Matahari Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramayana Lestari position performs unexpectedly, Matahari Putra 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 Putra will offset losses from the drop in Matahari Putra'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 Putra vs. Multipolar Tbk | Matahari Putra vs. Ramayana Lestari Sentosa | Matahari Putra vs. Lippo Karawaci Tbk | Matahari Putra vs. Mitra Adiperkasa 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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