Correlation Between Ladangbaja Murni and Panca Anugrah

Can any of the company-specific risk be diversified away by investing in both Ladangbaja Murni and Panca Anugrah 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 Panca Anugrah 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 Panca Anugrah Wisesa, you can compare the effects of market volatilities on Ladangbaja Murni and Panca Anugrah 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 Panca Anugrah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladangbaja Murni and Panca Anugrah.

Diversification Opportunities for Ladangbaja Murni and Panca Anugrah

-0.5

Correlation Coefficient

Ladangbaja Murni  Panca Anugrah

Very good diversification

The 3 months correlation between Ladangbaja and Panca is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ladangbaja Murni PT and Panca Anugrah Wisesa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Anugrah Wisesa 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 Panca Anugrah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Anugrah Wisesa has no effect on the direction of Ladangbaja Murni i.e., Ladangbaja Murni and Panca Anugrah go up and down completely randomly.

Pair Corralation between Ladangbaja Murni and Panca Anugrah

Assuming the 90 days trading horizon Ladangbaja Murni PT is expected to generate 1.45 times more return on investment than Panca Anugrah. However, Ladangbaja Murni is 1.45 times more volatile than Panca Anugrah Wisesa. It trades about 0.07 of its potential returns per unit of risk. Panca Anugrah Wisesa is currently generating about 0.04 per unit of risk. If you would invest  9,200  in Ladangbaja Murni PT on October 7, 2024 and sell it today you would earn a total of  20,600  from holding Ladangbaja Murni PT or generate 223.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ladangbaja Murni PT  vs.  Panca Anugrah Wisesa

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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Panca Anugrah Wisesa

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Panca Anugrah Wisesa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panca Anugrah disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ladangbaja Murni and Panca Anugrah

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

The idea behind Ladangbaja Murni PT and Panca Anugrah Wisesa 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.