Correlation Between PT Sunter and Ladangbaja Murni

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

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

Diversification Opportunities for PT Sunter and Ladangbaja Murni

-0.39

Correlation Coefficient

PT Sunter  Ladangbaja Murni

Very good diversification

The 3 months correlation between SNLK and Ladangbaja is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Sunter Lakeside and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni and PT Sunter 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 Sunter Lakeside are associated (or correlated) with Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of PT Sunter i.e., PT Sunter and Ladangbaja Murni go up and down completely randomly.

Pair Corralation between PT Sunter and Ladangbaja Murni

Assuming the 90 days trading horizon PT Sunter Lakeside is expected to generate 0.42 times more return on investment than Ladangbaja Murni. However, PT Sunter Lakeside is 2.36 times less risky than Ladangbaja Murni. It trades about -0.47 of its potential returns per unit of risk. Ladangbaja Murni PT is currently generating about -0.27 per unit of risk. If you would invest  84,000  in PT Sunter Lakeside on September 1, 2024 and sell it today you would lose (15,500) from holding PT Sunter Lakeside or give up 18.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

PT Sunter Lakeside  vs.  Ladangbaja Murni PT

PT Sunter Lakeside

Risk-Adjusted Performance

8 of 100

OK

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

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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT Sunter and Ladangbaja Murni

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

The idea behind PT Sunter Lakeside and Ladangbaja Murni 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .