Correlation Between Lippo Karawaci and Bukit Darmo
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Bukit Darmo 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 Bukit Darmo 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 Bukit Darmo Property, you can compare the effects of market volatilities on Lippo Karawaci and Bukit Darmo 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 Bukit Darmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Bukit Darmo.
Diversification Opportunities for Lippo Karawaci and Bukit Darmo
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lippo and Bukit is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Bukit Darmo Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Darmo Property 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 Bukit Darmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Darmo Property has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Bukit Darmo go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Bukit Darmo
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to under-perform the Bukit Darmo. In addition to that, Lippo Karawaci is 1.91 times more volatile than Bukit Darmo Property. It trades about -0.24 of its total potential returns per unit of risk. Bukit Darmo Property is currently generating about 0.06 per unit of volatility. If you would invest 4,900 in Bukit Darmo Property on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Bukit Darmo Property or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Bukit Darmo Property
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Bukit Darmo Property |
Lippo Karawaci and Bukit Darmo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Bukit Darmo
The main advantage of trading using opposite Lippo Karawaci and Bukit Darmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Bukit Darmo 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 Bukit Darmo will offset losses from the drop in Bukit Darmo's long position.| Lippo Karawaci vs. Lippo Cikarang Tbk | Lippo Karawaci vs. Intiland Development Tbk | Lippo Karawaci vs. Mitra Pinasthika Mustika | Lippo Karawaci vs. Jakarta Int Hotels |
| Bukit Darmo vs. Lippo Cikarang Tbk | Bukit Darmo vs. Lippo Karawaci Tbk | Bukit Darmo vs. Intiland Development Tbk | Bukit Darmo vs. Mitra Pinasthika Mustika |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |