Correlation Between PT Charlie and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both PT Charlie and Lautan Luas 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 Charlie and Lautan Luas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Charlie Hospital and Lautan Luas Tbk, you can compare the effects of market volatilities on PT Charlie and Lautan Luas 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 Charlie with a short position of Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charlie and Lautan Luas.
Diversification Opportunities for PT Charlie and Lautan Luas
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between RSCH and Lautan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PT Charlie Hospital and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas Tbk and PT Charlie 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 Charlie Hospital are associated (or correlated) with Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of PT Charlie i.e., PT Charlie and Lautan Luas go up and down completely randomly.
Pair Corralation between PT Charlie and Lautan Luas
Assuming the 90 days trading horizon PT Charlie Hospital is expected to under-perform the Lautan Luas. In addition to that, PT Charlie is 7.94 times more volatile than Lautan Luas Tbk. It trades about -0.09 of its total potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.09 per unit of volatility. If you would invest 101,500 in Lautan Luas Tbk on December 1, 2024 and sell it today you would lose (2,500) from holding Lautan Luas Tbk or give up 2.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Charlie Hospital vs. Lautan Luas Tbk
Performance |
Timeline |
PT Charlie Hospital |
Lautan Luas Tbk |
PT Charlie and Lautan Luas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Charlie and Lautan Luas
The main advantage of trading using opposite PT Charlie and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charlie position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.PT Charlie vs. Garuda Metalindo Tbk | PT Charlie vs. Alumindo Light Metal | PT Charlie vs. HK Metals Utama | PT Charlie vs. Optima Prima Metal |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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