Correlation Between Lippo Cikarang and Bukit Darmo
Can any of the company-specific risk be diversified away by investing in both Lippo Cikarang and Bukit Darmo 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 Lippo Cikarang and Bukit Darmo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lippo Cikarang Tbk and Bukit Darmo Property, you can compare the effects of market volatilities on Lippo Cikarang and Bukit Darmo 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 Lippo Cikarang with a short position of Bukit Darmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Cikarang and Bukit Darmo.
Diversification Opportunities for Lippo Cikarang and Bukit Darmo
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lippo and Bukit is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Cikarang Tbk and Bukit Darmo Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Darmo Property and Lippo Cikarang 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 Lippo Cikarang Tbk are associated (or correlated) with Bukit Darmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Darmo Property has no effect on the direction of Lippo Cikarang i.e., Lippo Cikarang and Bukit Darmo go up and down completely randomly.
Pair Corralation between Lippo Cikarang and Bukit Darmo
Assuming the 90 days trading horizon Lippo Cikarang Tbk is expected to under-perform the Bukit Darmo. But the stock apears to be less risky and, when comparing its historical volatility, Lippo Cikarang Tbk is 1.25 times less risky than Bukit Darmo. The stock trades about -0.1 of its potential returns per unit of risk. The Bukit Darmo Property is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,100 in Bukit Darmo Property on September 2, 2024 and sell it today you would earn a total of 900.00 from holding Bukit Darmo Property or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Cikarang Tbk vs. Bukit Darmo Property
Performance |
| Timeline |
| Lippo Cikarang Tbk |
| Bukit Darmo Property |
Lippo Cikarang and Bukit Darmo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Cikarang and Bukit Darmo
The main advantage of trading using opposite Lippo Cikarang and Bukit Darmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Cikarang position performs unexpectedly, Bukit Darmo 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 Bukit Darmo will offset losses from the drop in Bukit Darmo's long position.| Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Mitra Pinasthika Mustika | Lippo Cikarang vs. Jakarta Int Hotels | Lippo Cikarang vs. Indosterling Technomedia Tbk |
| Bukit Darmo vs. Bhuwanatala Indah Permai | Bukit Darmo vs. Bekasi Asri Pemula | Bukit Darmo vs. Intiland Development Tbk | Bukit Darmo vs. Perdana Gapura Prima |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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