Correlation Between Bhuwanatala Indah and Lippo Cikarang
Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah and Lippo Cikarang 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 Bhuwanatala Indah and Lippo Cikarang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bhuwanatala Indah Permai and Lippo Cikarang Tbk, you can compare the effects of market volatilities on Bhuwanatala Indah and Lippo Cikarang 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 Bhuwanatala Indah with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and Lippo Cikarang.
Diversification Opportunities for Bhuwanatala Indah and Lippo Cikarang
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bhuwanatala and Lippo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai and Lippo Cikarang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Cikarang Tbk and Bhuwanatala Indah 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 Bhuwanatala Indah Permai are associated (or correlated) with Lippo Cikarang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Cikarang Tbk has no effect on the direction of Bhuwanatala Indah i.e., Bhuwanatala Indah and Lippo Cikarang go up and down completely randomly.
Pair Corralation between Bhuwanatala Indah and Lippo Cikarang
Assuming the 90 days trading horizon Bhuwanatala Indah Permai is expected to under-perform the Lippo Cikarang. But the stock apears to be less risky and, when comparing its historical volatility, Bhuwanatala Indah Permai is 1.14 times less risky than Lippo Cikarang. The stock trades about -0.03 of its potential returns per unit of risk. The Lippo Cikarang Tbk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 99,500 in Lippo Cikarang Tbk on September 2, 2024 and sell it today you would lose (39,000) from holding Lippo Cikarang Tbk or give up 39.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bhuwanatala Indah Permai vs. Lippo Cikarang Tbk
Performance |
| Timeline |
| Bhuwanatala Indah Permai |
| Lippo Cikarang Tbk |
Bhuwanatala Indah and Lippo Cikarang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bhuwanatala Indah and Lippo Cikarang
The main advantage of trading using opposite Bhuwanatala Indah and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhuwanatala Indah position performs unexpectedly, Lippo Cikarang 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 Cikarang will offset losses from the drop in Lippo Cikarang's long position.| Bhuwanatala Indah vs. Lippo Cikarang Tbk | Bhuwanatala Indah vs. Lippo Karawaci Tbk | Bhuwanatala Indah vs. Mitra Pinasthika Mustika | Bhuwanatala Indah vs. Jakarta Int Hotels |
| Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Mitra Pinasthika Mustika | Lippo Cikarang vs. Jakarta Int Hotels | Lippo Cikarang vs. Indosterling Technomedia Tbk |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |