Correlation Between Lippo General and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Lippo General and Bekasi Fajar 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 General and Bekasi Fajar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lippo General Insurance and Bekasi Fajar Industrial, you can compare the effects of market volatilities on Lippo General and Bekasi Fajar 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 General with a short position of Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Bekasi Fajar.
Diversification Opportunities for Lippo General and Bekasi Fajar
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lippo and Bekasi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Bekasi Fajar Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bekasi Fajar Industrial and Lippo General 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 General Insurance are associated (or correlated) with Bekasi Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bekasi Fajar Industrial has no effect on the direction of Lippo General i.e., Lippo General and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Lippo General and Bekasi Fajar
Assuming the 90 days trading horizon Lippo General Insurance is expected to generate 0.56 times more return on investment than Bekasi Fajar. However, Lippo General Insurance is 1.78 times less risky than Bekasi Fajar. It trades about 0.17 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about -0.27 per unit of risk. If you would invest 35,400 in Lippo General Insurance on September 2, 2024 and sell it today you would earn a total of 1,400 from holding Lippo General Insurance or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo General Insurance vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Lippo General Insurance |
| Bekasi Fajar Industrial |
Lippo General and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and Bekasi Fajar
The main advantage of trading using opposite Lippo General and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Bekasi Fajar 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 Bekasi Fajar will offset losses from the drop in Bekasi Fajar's long position.| Lippo General vs. Maskapai Reasuransi Indonesia | Lippo General vs. Lenox Pasifik Investama | Lippo General vs. Paninvest Tbk | Lippo General vs. Bank Mayapada Internasional |
| Bekasi Fajar vs. Agung Podomoro Land | Bekasi Fajar vs. Surya Semesta Internusa | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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