Correlation Between Lippo Karawaci and Multipolar Tbk
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Multipolar Tbk 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 Multipolar Tbk 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 Multipolar Tbk, you can compare the effects of market volatilities on Lippo Karawaci and Multipolar Tbk 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 Multipolar Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Multipolar Tbk.
Diversification Opportunities for Lippo Karawaci and Multipolar Tbk
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lippo and Multipolar is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Multipolar Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multipolar Tbk 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 Multipolar Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multipolar Tbk has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Multipolar Tbk go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Multipolar Tbk
Assuming the 90 days trading horizon Lippo Karawaci is expected to generate 2.53 times less return on investment than Multipolar Tbk. But when comparing it to its historical volatility, Lippo Karawaci Tbk is 1.35 times less risky than Multipolar Tbk. It trades about 0.02 of its potential returns per unit of risk. Multipolar Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,000 in Multipolar Tbk on August 29, 2024 and sell it today you would earn a total of 3,900 from holding Multipolar Tbk or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Multipolar Tbk
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Multipolar Tbk |
Lippo Karawaci and Multipolar Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Multipolar Tbk
The main advantage of trading using opposite Lippo Karawaci and Multipolar Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Multipolar Tbk 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 Multipolar Tbk will offset losses from the drop in Multipolar Tbk'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 |
| Multipolar Tbk vs. Matahari Putra Prima | Multipolar Tbk vs. Mnc Investama Tbk | Multipolar Tbk vs. Kawasan Industri Jababeka | Multipolar Tbk vs. Lippo Karawaci 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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