Correlation Between Langgeng Makmur and Dana Brata

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

By analyzing existing cross correlation between Langgeng Makmur Industri and Dana Brata Luhur, you can compare the effects of market volatilities on Langgeng Makmur and Dana Brata 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 Langgeng Makmur with a short position of Dana Brata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Langgeng Makmur and Dana Brata.

Diversification Opportunities for Langgeng Makmur and Dana Brata

0.37

Correlation Coefficient

Langgeng Makmur  Dana Brata

Weak diversification

The 3 months correlation between Langgeng and Dana is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Langgeng Makmur Industri and Dana Brata Luhur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Brata Luhur and Langgeng Makmur 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 Langgeng Makmur Industri are associated (or correlated) with Dana Brata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Brata Luhur has no effect on the direction of Langgeng Makmur i.e., Langgeng Makmur and Dana Brata go up and down completely randomly.

Pair Corralation between Langgeng Makmur and Dana Brata

Assuming the 90 days trading horizon Langgeng Makmur Industri is expected to generate 7.17 times more return on investment than Dana Brata. However, Langgeng Makmur is 7.17 times more volatile than Dana Brata Luhur. It trades about 0.01 of its potential returns per unit of risk. Dana Brata Luhur is currently generating about -0.66 per unit of risk. If you would invest  12,900  in Langgeng Makmur Industri on December 2, 2024 and sell it today you would lose (200.00) from holding Langgeng Makmur Industri or give up 1.55% of portfolio value over 90 days.

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

Langgeng Makmur Industri  vs.  Dana Brata Luhur

Langgeng Makmur Industri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Langgeng Makmur Industri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Dana Brata Luhur

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dana Brata Luhur 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Langgeng Makmur and Dana Brata

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

The idea behind Langgeng Makmur Industri and Dana Brata Luhur 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.