Correlation Between Ladangbaja Murni and Ifishdeco

Can any of the company-specific risk be diversified away by investing in both Ladangbaja Murni and Ifishdeco 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 Ladangbaja Murni and Ifishdeco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ladangbaja Murni PT and Ifishdeco PT, you can compare the effects of market volatilities on Ladangbaja Murni and Ifishdeco 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 Ladangbaja Murni with a short position of Ifishdeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladangbaja Murni and Ifishdeco.

Diversification Opportunities for Ladangbaja Murni and Ifishdeco

0.67

Correlation Coefficient

Ladangbaja Murni  Ifishdeco

Poor diversification

The 3 months correlation between Ladangbaja and Ifishdeco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ladangbaja Murni PT and Ifishdeco PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ifishdeco PT and Ladangbaja Murni 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 Ladangbaja Murni PT are associated (or correlated) with Ifishdeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ifishdeco PT has no effect on the direction of Ladangbaja Murni i.e., Ladangbaja Murni and Ifishdeco go up and down completely randomly.

Pair Corralation between Ladangbaja Murni and Ifishdeco

Assuming the 90 days trading horizon Ladangbaja Murni PT is expected to generate 1.93 times more return on investment than Ifishdeco. However, Ladangbaja Murni is 1.93 times more volatile than Ifishdeco PT. It trades about 0.07 of its potential returns per unit of risk. Ifishdeco PT is currently generating about -0.01 per unit of risk. If you would invest  9,600  in Ladangbaja Murni PT on September 5, 2024 and sell it today you would earn a total of  19,600  from holding Ladangbaja Murni PT or generate 204.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Ladangbaja Murni PT  vs.  Ifishdeco PT

Ladangbaja Murni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladangbaja Murni PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ifishdeco PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ifishdeco PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ifishdeco is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ladangbaja Murni and Ifishdeco

The main advantage of trading using opposite Ladangbaja Murni and Ifishdeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladangbaja Murni position performs unexpectedly, Ifishdeco 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 Ifishdeco will offset losses from the drop in Ifishdeco's long position.

The idea behind Ladangbaja Murni PT and Ifishdeco PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.