Correlation Between PT Winner and Lancartama Sejati

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

By analyzing existing cross correlation between PT Winner Nusantara and Lancartama Sejati Tbk, you can compare the effects of market volatilities on PT Winner and Lancartama Sejati 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 Winner with a short position of Lancartama Sejati. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Winner and Lancartama Sejati.

Diversification Opportunities for PT Winner and Lancartama Sejati

0.51

Correlation Coefficient

PT Winner  Lancartama Sejati

Very weak diversification

The 3 months correlation between WINR and Lancartama is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PT Winner Nusantara and Lancartama Sejati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancartama Sejati Tbk and PT Winner 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 Winner Nusantara are associated (or correlated) with Lancartama Sejati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancartama Sejati Tbk has no effect on the direction of PT Winner i.e., PT Winner and Lancartama Sejati go up and down completely randomly.

Pair Corralation between PT Winner and Lancartama Sejati

Assuming the 90 days trading horizon PT Winner is expected to generate 1.28 times less return on investment than Lancartama Sejati. But when comparing it to its historical volatility, PT Winner Nusantara is 1.4 times less risky than Lancartama Sejati. It trades about 0.2 of its potential returns per unit of risk. Lancartama Sejati Tbk is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,400  in Lancartama Sejati Tbk on December 24, 2024 and sell it today you would earn a total of  1,000.00  from holding Lancartama Sejati Tbk or generate 71.43% return on investment over 90 days.

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

PT Winner Nusantara  vs.  Lancartama Sejati Tbk

PT Winner Nusantara

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Winner Nusantara are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Winner disclosed solid returns over the last few months and may actually be approaching a breakup point.

Lancartama Sejati Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lancartama Sejati Tbk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Lancartama Sejati disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Winner and Lancartama Sejati

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

The idea behind PT Winner Nusantara and Lancartama Sejati Tbk 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.