Correlation Between Sumber Global and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both Sumber Global 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 Sumber Global and Lancartama Sejati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Global Energy and Lancartama Sejati Tbk, you can compare the effects of market volatilities on Sumber Global 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 Sumber Global with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Global and Lancartama Sejati.
Diversification Opportunities for Sumber Global and Lancartama Sejati
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumber and Lancartama is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Global Energy 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 Sumber Global 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 Sumber Global Energy 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 Sumber Global i.e., Sumber Global and Lancartama Sejati go up and down completely randomly.
Pair Corralation between Sumber Global and Lancartama Sejati
Assuming the 90 days trading horizon Sumber Global Energy is expected to generate 10.06 times more return on investment than Lancartama Sejati. However, Sumber Global is 10.06 times more volatile than Lancartama Sejati Tbk. It trades about 0.05 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about -0.03 per unit of risk. If you would invest 15,925 in Sumber Global Energy on September 4, 2024 and sell it today you would earn a total of 28,275 from holding Sumber Global Energy or generate 177.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Global Energy vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| Sumber Global Energy |
| Lancartama Sejati Tbk |
Sumber Global and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Global and Lancartama Sejati
The main advantage of trading using opposite Sumber Global and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Global 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.| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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