Correlation Between Repower Asia and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Repower Asia 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 Repower Asia and Lancartama Sejati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Lancartama Sejati Tbk, you can compare the effects of market volatilities on Repower Asia 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 Repower Asia with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Lancartama Sejati.
Diversification Opportunities for Repower Asia and Lancartama Sejati
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Repower and Lancartama is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia 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 Repower Asia 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 Repower Asia Indonesia 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 Repower Asia i.e., Repower Asia and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Repower Asia and Lancartama Sejati
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 1.76 times more return on investment than Lancartama Sejati. However, Repower Asia is 1.76 times more volatile than Lancartama Sejati Tbk. It trades about 0.09 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about 0.13 per unit of risk. If you would invest 500.00 in Repower Asia Indonesia on September 5, 2024 and sell it today you would earn a total of 300.00 from holding Repower Asia Indonesia or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Repower Asia Indonesia |
| Lancartama Sejati Tbk |
Repower Asia and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Lancartama Sejati
The main advantage of trading using opposite Repower Asia and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia 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.| Repower Asia vs. PT Wahana Interfood | Repower Asia vs. Fast Food Indonesia | Repower Asia vs. PT Jobubu Jarum | Repower Asia vs. Sentra Food Indonesia |
| Lancartama Sejati vs. Bima Sakti Pertiwi | Lancartama Sejati vs. Repower Asia Indonesia | Lancartama Sejati vs. Pollux Properti Indonesia | Lancartama Sejati vs. Gaya Abadi Sempurna |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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