Correlation Between PT Pelayaran and Logindo Samudramakmur

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

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

Diversification Opportunities for PT Pelayaran and Logindo Samudramakmur

-0.68

Correlation Coefficient

PT Pelayaran  Logindo Samudramakmur

Excellent diversification

The 3 months correlation between TAMU and Logindo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Pelayaran Tamarin and Logindo Samudramakmur Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logindo Samudramakmur Tbk and PT Pelayaran 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 Pelayaran Tamarin are associated (or correlated) with Logindo Samudramakmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logindo Samudramakmur Tbk has no effect on the direction of PT Pelayaran i.e., PT Pelayaran and Logindo Samudramakmur go up and down completely randomly.

Pair Corralation between PT Pelayaran and Logindo Samudramakmur

Assuming the 90 days trading horizon PT Pelayaran Tamarin is expected to under-perform the Logindo Samudramakmur. But the stock apears to be less risky and, when comparing its historical volatility, PT Pelayaran Tamarin is 1.04 times less risky than Logindo Samudramakmur. The stock trades about -0.12 of its potential returns per unit of risk. The Logindo Samudramakmur Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,400  in Logindo Samudramakmur Tbk on September 18, 2024 and sell it today you would earn a total of  2,000  from holding Logindo Samudramakmur Tbk or generate 21.28% return on investment over 90 days.

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

PT Pelayaran Tamarin  vs.  Logindo Samudramakmur Tbk

PT Pelayaran Tamarin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Pelayaran Tamarin 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Logindo Samudramakmur Tbk

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logindo Samudramakmur Tbk are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Logindo Samudramakmur disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Pelayaran and Logindo Samudramakmur

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

The idea behind PT Pelayaran Tamarin and Logindo Samudramakmur 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.