Correlation Between Tera Data and Lippo General
Can any of the company-specific risk be diversified away by investing in both Tera Data and Lippo General 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 Tera Data and Lippo General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tera Data Indonusa and Lippo General Insurance, you can compare the effects of market volatilities on Tera Data and Lippo General 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 Tera Data with a short position of Lippo General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tera Data and Lippo General.
Diversification Opportunities for Tera Data and Lippo General
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tera and Lippo is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tera Data Indonusa and Lippo General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo General Insurance and Tera Data 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 Tera Data Indonusa are associated (or correlated) with Lippo General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo General Insurance has no effect on the direction of Tera Data i.e., Tera Data and Lippo General go up and down completely randomly.
Pair Corralation between Tera Data and Lippo General
Assuming the 90 days trading horizon Tera Data Indonusa is expected to under-perform the Lippo General. But the stock apears to be less risky and, when comparing its historical volatility, Tera Data Indonusa is 2.04 times less risky than Lippo General. The stock trades about -0.1 of its potential returns per unit of risk. The Lippo General Insurance is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30,156 in Lippo General Insurance on November 5, 2024 and sell it today you would earn a total of 1,244 from holding Lippo General Insurance or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Tera Data Indonusa vs. Lippo General Insurance
Performance |
| Timeline |
| Tera Data Indonusa |
| Lippo General Insurance |
Tera Data and Lippo General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tera Data and Lippo General
The main advantage of trading using opposite Tera Data and Lippo General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tera Data position performs unexpectedly, Lippo General 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 Lippo General will offset losses from the drop in Lippo General's long position.| Tera Data vs. PT Dewi Shri | Tera Data vs. PT Arkora Hydro | Tera Data vs. Habco Trans Maritima | Tera Data vs. PT Jhonlin Agro |
| Lippo General vs. Maskapai Reasuransi Indonesia | Lippo General vs. Lenox Pasifik Investama | Lippo General vs. Paninvest Tbk | Lippo General vs. Bank Mayapada Internasional |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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