Correlation Between Lippo General and Venteny Fortuna
Can any of the company-specific risk be diversified away by investing in both Lippo General and Venteny Fortuna 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 Venteny Fortuna 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 Venteny Fortuna International, you can compare the effects of market volatilities on Lippo General and Venteny Fortuna 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 Venteny Fortuna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Venteny Fortuna.
Diversification Opportunities for Lippo General and Venteny Fortuna
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lippo and Venteny is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Venteny Fortuna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venteny Fortuna Inte 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 Venteny Fortuna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venteny Fortuna Inte has no effect on the direction of Lippo General i.e., Lippo General and Venteny Fortuna go up and down completely randomly.
Pair Corralation between Lippo General and Venteny Fortuna
Assuming the 90 days trading horizon Lippo General Insurance is expected to generate 1.38 times more return on investment than Venteny Fortuna. However, Lippo General is 1.38 times more volatile than Venteny Fortuna International. It trades about 0.05 of its potential returns per unit of risk. Venteny Fortuna International is currently generating about 0.07 per unit of risk. If you would invest 31,000 in Lippo General Insurance on August 30, 2024 and sell it today you would earn a total of 5,800 from holding Lippo General Insurance or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo General Insurance vs. Venteny Fortuna International
Performance |
| Timeline |
| Lippo General Insurance |
| Venteny Fortuna Inte |
Lippo General and Venteny Fortuna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo General and Venteny Fortuna
The main advantage of trading using opposite Lippo General and Venteny Fortuna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Venteny Fortuna 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 Venteny Fortuna will offset losses from the drop in Venteny Fortuna's long position.| Lippo General vs. Bank Cimb Niaga | Lippo General vs. Indosat Tbk | Lippo General vs. Astra Agro Lestari | Lippo General vs. Indocement Tunggal Prakarsa |
| Venteny Fortuna vs. Indo Acidatama Tbk | Venteny Fortuna vs. Wintermar Offshore Marine | Venteny Fortuna vs. Metrodata Electronics Tbk | Venteny Fortuna vs. Humpuss Intermoda Transportasi |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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