Correlation Between Lippo Cikarang and Mnc Land
Can any of the company-specific risk be diversified away by investing in both Lippo Cikarang and Mnc Land 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 Mnc Land 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 Mnc Land Tbk, you can compare the effects of market volatilities on Lippo Cikarang and Mnc Land 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 Mnc Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Cikarang and Mnc Land.
Diversification Opportunities for Lippo Cikarang and Mnc Land
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lippo and Mnc is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Cikarang Tbk and Mnc Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Land Tbk 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 Mnc Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Land Tbk has no effect on the direction of Lippo Cikarang i.e., Lippo Cikarang and Mnc Land go up and down completely randomly.
Pair Corralation between Lippo Cikarang and Mnc Land
Assuming the 90 days trading horizon Lippo Cikarang Tbk is expected to generate 0.63 times more return on investment than Mnc Land. However, Lippo Cikarang Tbk is 1.6 times less risky than Mnc Land. It trades about -0.1 of its potential returns per unit of risk. Mnc Land Tbk is currently generating about -0.1 per unit of risk. If you would invest 53,000 in Lippo Cikarang Tbk on November 3, 2024 and sell it today you would lose (2,000) from holding Lippo Cikarang Tbk or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Cikarang Tbk vs. Mnc Land Tbk
Performance |
| Timeline |
| Lippo Cikarang Tbk |
| Mnc Land Tbk |
Lippo Cikarang and Mnc Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Cikarang and Mnc Land
The main advantage of trading using opposite Lippo Cikarang and Mnc Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Cikarang position performs unexpectedly, Mnc Land 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 Mnc Land will offset losses from the drop in Mnc Land's long position.| Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Surya Semesta Internusa | Lippo Cikarang vs. Modernland Realty Ltd | Lippo Cikarang vs. Summarecon Agung Tbk |
| Mnc Land vs. Modernland Realty Ltd | Mnc Land vs. Jaya Real Property | Mnc Land vs. Lippo Cikarang Tbk | Mnc Land 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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