Correlation Between Fortune Mate and Lippo Cikarang
Can any of the company-specific risk be diversified away by investing in both Fortune Mate 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 Fortune Mate and Lippo Cikarang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Mate Indonesia and Lippo Cikarang Tbk, you can compare the effects of market volatilities on Fortune Mate 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 Fortune Mate with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Mate and Lippo Cikarang.
Diversification Opportunities for Fortune Mate and Lippo Cikarang
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortune and Lippo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Mate Indonesia 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 Fortune Mate 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 Fortune Mate Indonesia 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 Fortune Mate i.e., Fortune Mate and Lippo Cikarang go up and down completely randomly.
Pair Corralation between Fortune Mate and Lippo Cikarang
Assuming the 90 days trading horizon Fortune Mate Indonesia is expected to generate 3.74 times more return on investment than Lippo Cikarang. However, Fortune Mate is 3.74 times more volatile than Lippo Cikarang Tbk. It trades about 0.48 of its potential returns per unit of risk. Lippo Cikarang Tbk is currently generating about -0.33 per unit of risk. If you would invest 22,800 in Fortune Mate Indonesia on September 2, 2024 and sell it today you would earn a total of 31,700 from holding Fortune Mate Indonesia or generate 139.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fortune Mate Indonesia vs. Lippo Cikarang Tbk
Performance |
| Timeline |
| Fortune Mate Indonesia |
| Lippo Cikarang Tbk |
Fortune Mate and Lippo Cikarang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Mate and Lippo Cikarang
The main advantage of trading using opposite Fortune Mate and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Mate 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.| Fortune Mate vs. Lippo Cikarang Tbk | Fortune Mate vs. Bekasi Asri Pemula | Fortune Mate vs. Mitra Pinasthika Mustika | Fortune Mate 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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