Correlation Between Lippo General and Trimegah Karya
Can any of the company-specific risk be diversified away by investing in both Lippo General and Trimegah Karya 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 Trimegah Karya 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 Trimegah Karya Pratama, you can compare the effects of market volatilities on Lippo General and Trimegah Karya 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 Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Trimegah Karya.
Diversification Opportunities for Lippo General and Trimegah Karya
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lippo and Trimegah is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama 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 Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of Lippo General i.e., Lippo General and Trimegah Karya go up and down completely randomly.
Pair Corralation between Lippo General and Trimegah Karya
Assuming the 90 days trading horizon Lippo General Insurance is expected to under-perform the Trimegah Karya. But the stock apears to be less risky and, when comparing its historical volatility, Lippo General Insurance is 5.85 times less risky than Trimegah Karya. The stock trades about -0.41 of its potential returns per unit of risk. The Trimegah Karya Pratama is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,200 in Trimegah Karya Pratama on November 29, 2024 and sell it today you would lose (100.00) from holding Trimegah Karya Pratama or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo General Insurance vs. Trimegah Karya Pratama
Performance |
| Timeline |
| Lippo General Insurance |
| Trimegah Karya Pratama |
Lippo General and Trimegah Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and Trimegah Karya
The main advantage of trading using opposite Lippo General and Trimegah Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Trimegah Karya 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 Trimegah Karya will offset losses from the drop in Trimegah Karya'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 |
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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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