Correlation Between Lippo General and Intermedia Capital
Can any of the company-specific risk be diversified away by investing in both Lippo General and Intermedia Capital 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 Intermedia Capital 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 Intermedia Capital Tbk, you can compare the effects of market volatilities on Lippo General and Intermedia Capital 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 Intermedia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Intermedia Capital.
Diversification Opportunities for Lippo General and Intermedia Capital
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lippo and Intermedia is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Intermedia Capital Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedia Capital Tbk 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 Intermedia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedia Capital Tbk has no effect on the direction of Lippo General i.e., Lippo General and Intermedia Capital go up and down completely randomly.
Pair Corralation between Lippo General and Intermedia Capital
Assuming the 90 days trading horizon Lippo General Insurance is expected to under-perform the Intermedia Capital. But the stock apears to be less risky and, when comparing its historical volatility, Lippo General Insurance is 10.74 times less risky than Intermedia Capital. The stock trades about -0.42 of its potential returns per unit of risk. The Intermedia Capital Tbk is currently generating about 0.9 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Intermedia Capital Tbk on November 28, 2024 and sell it today you would earn a total of 2,400 from holding Intermedia Capital Tbk or generate 133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo General Insurance vs. Intermedia Capital Tbk
Performance |
| Timeline |
| Lippo General Insurance |
| Intermedia Capital Tbk |
Lippo General and Intermedia Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and Intermedia Capital
The main advantage of trading using opposite Lippo General and Intermedia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Intermedia Capital 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 Intermedia Capital will offset losses from the drop in Intermedia Capital'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 |
| Intermedia Capital vs. Visi Media Asia | Intermedia Capital vs. Mnc Sky Vision | Intermedia Capital vs. Mahaka Radio Integra | Intermedia Capital vs. Mnc Land 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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