Correlation Between PT Boston and Lancartama Sejati
Can any of the company-specific risk be diversified away by investing in both PT Boston 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 PT Boston and Lancartama Sejati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Boston Furniture and Lancartama Sejati Tbk, you can compare the effects of market volatilities on PT Boston 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 PT Boston with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Boston and Lancartama Sejati.
Diversification Opportunities for PT Boston and Lancartama Sejati
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOFA and Lancartama is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PT Boston Furniture 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 PT Boston 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 PT Boston Furniture 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 PT Boston i.e., PT Boston and Lancartama Sejati go up and down completely randomly.
Pair Corralation between PT Boston and Lancartama Sejati
Assuming the 90 days trading horizon PT Boston Furniture is expected to generate 1.05 times more return on investment than Lancartama Sejati. However, PT Boston is 1.05 times more volatile than Lancartama Sejati Tbk. It trades about 0.71 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about 0.02 per unit of risk. If you would invest 1,900 in PT Boston Furniture on September 1, 2024 and sell it today you would earn a total of 1,700 from holding PT Boston Furniture or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Boston Furniture vs. Lancartama Sejati Tbk
Performance |
| Timeline |
| PT Boston Furniture |
| Lancartama Sejati Tbk |
PT Boston and Lancartama Sejati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Boston and Lancartama Sejati
The main advantage of trading using opposite PT Boston and Lancartama Sejati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Boston 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.| PT Boston vs. Pt Pakuan Tbk | PT Boston vs. Integra Indocabinet Tbk | PT Boston vs. Multistrada Arah Sarana | PT Boston vs. PT MNC Energy |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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