Correlation Between Lippo Karawaci and Alam Sutera
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Alam Sutera 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 Karawaci and Alam Sutera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lippo Karawaci Tbk and Alam Sutera Realty, you can compare the effects of market volatilities on Lippo Karawaci and Alam Sutera 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 Karawaci with a short position of Alam Sutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Alam Sutera.
Diversification Opportunities for Lippo Karawaci and Alam Sutera
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lippo and Alam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Alam Sutera Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alam Sutera Realty and Lippo Karawaci 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 Karawaci Tbk are associated (or correlated) with Alam Sutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alam Sutera Realty has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Alam Sutera go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Alam Sutera
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to under-perform the Alam Sutera. But the stock apears to be less risky and, when comparing its historical volatility, Lippo Karawaci Tbk is 1.12 times less risky than Alam Sutera. The stock trades about -0.28 of its potential returns per unit of risk. The Alam Sutera Realty is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14,300 in Alam Sutera Realty on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Alam Sutera Realty or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Alam Sutera Realty
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Alam Sutera Realty |
Lippo Karawaci and Alam Sutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Alam Sutera
The main advantage of trading using opposite Lippo Karawaci and Alam Sutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Alam Sutera 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 Alam Sutera will offset losses from the drop in Alam Sutera's long position.| Lippo Karawaci vs. Bumi Serpong Damai | Lippo Karawaci vs. Alam Sutera Realty | Lippo Karawaci vs. Summarecon Agung Tbk | Lippo Karawaci vs. Ciputra Development Tbk |
| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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