Correlation Between Jaya Real and Lippo Cikarang
Can any of the company-specific risk be diversified away by investing in both Jaya Real 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 Jaya Real and Lippo Cikarang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaya Real Property and Lippo Cikarang Tbk, you can compare the effects of market volatilities on Jaya Real 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 Jaya Real with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaya Real and Lippo Cikarang.
Diversification Opportunities for Jaya Real and Lippo Cikarang
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jaya and Lippo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jaya Real Property 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 Jaya Real 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 Jaya Real Property 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 Jaya Real i.e., Jaya Real and Lippo Cikarang go up and down completely randomly.
Pair Corralation between Jaya Real and Lippo Cikarang
Assuming the 90 days trading horizon Jaya Real Property is expected to generate 0.2 times more return on investment than Lippo Cikarang. However, Jaya Real Property is 5.06 times less risky than Lippo Cikarang. It trades about 0.13 of its potential returns per unit of risk. Lippo Cikarang Tbk is currently generating about -0.36 per unit of risk. If you would invest 65,500 in Jaya Real Property on August 28, 2024 and sell it today you would earn a total of 1,000.00 from holding Jaya Real Property or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaya Real Property vs. Lippo Cikarang Tbk
Performance |
| Timeline |
| Jaya Real Property |
| Lippo Cikarang Tbk |
Jaya Real and Lippo Cikarang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaya Real and Lippo Cikarang
The main advantage of trading using opposite Jaya Real and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaya Real 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.| Jaya Real vs. Lippo Cikarang Tbk | Jaya Real vs. Duta Pertiwi Tbk | Jaya Real vs. Intiland Development Tbk | Jaya Real vs. Mnc Land Tbk |
| Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Surya Semesta Internusa | Lippo Cikarang vs. Modernland Realty Ltd | Lippo Cikarang vs. Summarecon Agung 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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