Correlation Between Ramayana Lestari and Anabatic Technologies

Can any of the company-specific risk be diversified away by investing in both Ramayana Lestari and Anabatic Technologies 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 Ramayana Lestari and Anabatic Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ramayana Lestari Sentosa and Anabatic Technologies Tbk, you can compare the effects of market volatilities on Ramayana Lestari and Anabatic Technologies 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 Ramayana Lestari with a short position of Anabatic Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramayana Lestari and Anabatic Technologies.

Diversification Opportunities for Ramayana Lestari and Anabatic Technologies

0.81

Correlation Coefficient

Ramayana Lestari  Anabatic Technologies

Very poor diversification

The 3 months correlation between Ramayana and Anabatic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ramayana Lestari Sentosa and Anabatic Technologies Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anabatic Technologies Tbk and Ramayana Lestari 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 Ramayana Lestari Sentosa are associated (or correlated) with Anabatic Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anabatic Technologies Tbk has no effect on the direction of Ramayana Lestari i.e., Ramayana Lestari and Anabatic Technologies go up and down completely randomly.

Pair Corralation between Ramayana Lestari and Anabatic Technologies

Assuming the 90 days trading horizon Ramayana Lestari Sentosa is expected to generate 0.78 times more return on investment than Anabatic Technologies. However, Ramayana Lestari Sentosa is 1.29 times less risky than Anabatic Technologies. It trades about -0.15 of its potential returns per unit of risk. Anabatic Technologies Tbk is currently generating about -0.15 per unit of risk. If you would invest  41,400  in Ramayana Lestari Sentosa on September 16, 2024 and sell it today you would lose (3,400) from holding Ramayana Lestari Sentosa or give up 8.21% of portfolio value over 90 days.

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

Ramayana Lestari Sentosa  vs.  Anabatic Technologies Tbk

Ramayana Lestari Sentosa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramayana Lestari Sentosa 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.

Anabatic Technologies Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anabatic Technologies Tbk 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.

Pair Trading with Ramayana Lestari and Anabatic Technologies

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

The idea behind Ramayana Lestari Sentosa and Anabatic Technologies 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.