Correlation Between Lippo General and PT Data
Can any of the company-specific risk be diversified away by investing in both Lippo General and PT Data 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 PT Data 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 PT Data Sinergitama, you can compare the effects of market volatilities on Lippo General and PT Data 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 PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and PT Data.
Diversification Opportunities for Lippo General and PT Data
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lippo and ELIT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama 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 PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Lippo General i.e., Lippo General and PT Data go up and down completely randomly.
Pair Corralation between Lippo General and PT Data
Assuming the 90 days trading horizon Lippo General Insurance is expected to under-perform the PT Data. But the stock apears to be less risky and, when comparing its historical volatility, Lippo General Insurance is 10.34 times less risky than PT Data. The stock trades about -0.24 of its potential returns per unit of risk. The PT Data Sinergitama is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,900 in PT Data Sinergitama on November 5, 2024 and sell it today you would earn a total of 1,100 from holding PT Data Sinergitama or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Lippo General Insurance vs. PT Data Sinergitama
Performance |
| Timeline |
| Lippo General Insurance |
| PT Data Sinergitama |
Lippo General and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and PT Data
The main advantage of trading using opposite Lippo General and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, PT Data 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 PT Data will offset losses from the drop in PT Data'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 |
| PT Data vs. Indosterling Technomedia Tbk | PT Data vs. Indonesian Tobacco Tbk | PT Data vs. Ashmore Asset Management | PT Data vs. Siloam International Hospitals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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