Correlation Between Indosat Tbk and Lippo Karawaci
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Lippo Karawaci 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 Indosat Tbk and Lippo Karawaci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Lippo Karawaci Tbk, you can compare the effects of market volatilities on Indosat Tbk and Lippo Karawaci 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 Indosat Tbk with a short position of Lippo Karawaci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Lippo Karawaci.
Diversification Opportunities for Indosat Tbk and Lippo Karawaci
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indosat and Lippo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Lippo Karawaci Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Karawaci Tbk and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Lippo Karawaci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Karawaci Tbk has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Lippo Karawaci go up and down completely randomly.
Pair Corralation between Indosat Tbk and Lippo Karawaci
Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Lippo Karawaci. In addition to that, Indosat Tbk is 1.28 times more volatile than Lippo Karawaci Tbk. It trades about -0.03 of its total potential returns per unit of risk. Lippo Karawaci Tbk is currently generating about 0.02 per unit of volatility. If you would invest 10,300 in Lippo Karawaci Tbk on August 31, 2024 and sell it today you would earn a total of 500.00 from holding Lippo Karawaci Tbk or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Indosat Tbk vs. Lippo Karawaci Tbk
Performance |
| Timeline |
| Indosat Tbk |
| Lippo Karawaci Tbk |
Indosat Tbk and Lippo Karawaci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Lippo Karawaci
The main advantage of trading using opposite Indosat Tbk and Lippo Karawaci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Lippo Karawaci 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 Karawaci will offset losses from the drop in Lippo Karawaci's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Lippo Karawaci vs. Lippo Cikarang Tbk | Lippo Karawaci vs. Intiland Development Tbk | Lippo Karawaci vs. Mitra Pinasthika Mustika | Lippo Karawaci vs. Jakarta Int Hotels |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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