Correlation Between Lippo General and Aesler Grup
Can any of the company-specific risk be diversified away by investing in both Lippo General and Aesler Grup 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 Aesler Grup 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 Aesler Grup Internasional, you can compare the effects of market volatilities on Lippo General and Aesler Grup 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 Aesler Grup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Aesler Grup.
Diversification Opportunities for Lippo General and Aesler Grup
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lippo and Aesler is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Aesler Grup Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesler Grup Internasional 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 Aesler Grup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesler Grup Internasional has no effect on the direction of Lippo General i.e., Lippo General and Aesler Grup go up and down completely randomly.
Pair Corralation between Lippo General and Aesler Grup
Assuming the 90 days trading horizon Lippo General Insurance is expected to generate 0.05 times more return on investment than Aesler Grup. However, Lippo General Insurance is 20.08 times less risky than Aesler Grup. It trades about -0.46 of its potential returns per unit of risk. Aesler Grup Internasional is currently generating about -0.04 per unit of risk. If you would invest 31,400 in Lippo General Insurance on December 4, 2024 and sell it today you would lose (1,400) from holding Lippo General Insurance or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lippo General Insurance vs. Aesler Grup Internasional
Performance |
| Timeline |
| Lippo General Insurance |
| Aesler Grup Internasional |
Lippo General and Aesler Grup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and Aesler Grup
The main advantage of trading using opposite Lippo General and Aesler Grup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Aesler Grup 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 Aesler Grup will offset losses from the drop in Aesler Grup'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 |
| Aesler Grup vs. Victoria Insurance Tbk | Aesler Grup vs. PT Indofood Sukses | Aesler Grup vs. Garudafood Putra Putri | Aesler Grup vs. Dharma Polimetal 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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