Correlation Between Pool Advista and Langgeng Makmur

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

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

Diversification Opportunities for Pool Advista and Langgeng Makmur

-0.2

Correlation Coefficient

Pool Advista  Langgeng Makmur

Good diversification

The 3 months correlation between Pool and Langgeng is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pool Advista Finance and Langgeng Makmur Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Langgeng Makmur Industri and Pool Advista 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 Pool Advista Finance are associated (or correlated) with Langgeng Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Langgeng Makmur Industri has no effect on the direction of Pool Advista i.e., Pool Advista and Langgeng Makmur go up and down completely randomly.

Pair Corralation between Pool Advista and Langgeng Makmur

Assuming the 90 days trading horizon Pool Advista Finance is expected to generate 0.84 times more return on investment than Langgeng Makmur. However, Pool Advista Finance is 1.19 times less risky than Langgeng Makmur. It trades about 0.1 of its potential returns per unit of risk. Langgeng Makmur Industri is currently generating about 0.01 per unit of risk. If you would invest  1,100  in Pool Advista Finance on November 27, 2024 and sell it today you would earn a total of  300.00  from holding Pool Advista Finance or generate 27.27% return on investment over 90 days.

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

Pool Advista Finance  vs.  Langgeng Makmur Industri

Pool Advista Finance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pool Advista Finance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pool Advista disclosed solid returns over the last few months and may actually be approaching a breakup point.

Langgeng Makmur Industri

Risk-Adjusted Performance

Weak

Over the last 90 days Langgeng Makmur Industri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Langgeng Makmur 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 Pool Advista and Langgeng Makmur

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

The idea behind Pool Advista Finance and Langgeng Makmur Industri 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.