Correlation Between Lippo Karawaci and Pakuwon Jati
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Pakuwon Jati 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 Pakuwon Jati 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 Pakuwon Jati Tbk, you can compare the effects of market volatilities on Lippo Karawaci and Pakuwon Jati 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 Pakuwon Jati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Pakuwon Jati.
Diversification Opportunities for Lippo Karawaci and Pakuwon Jati
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lippo and Pakuwon is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Pakuwon Jati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakuwon Jati 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 Pakuwon Jati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakuwon Jati Tbk has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Pakuwon Jati go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Pakuwon Jati
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to under-perform the Pakuwon Jati. In addition to that, Lippo Karawaci is 1.26 times more volatile than Pakuwon Jati Tbk. It trades about -0.28 of its total potential returns per unit of risk. Pakuwon Jati Tbk is currently generating about -0.06 per unit of volatility. If you would invest 40,200 in Pakuwon Jati Tbk on November 3, 2024 and sell it today you would lose (1,000.00) from holding Pakuwon Jati Tbk or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Pakuwon Jati Tbk
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Pakuwon Jati Tbk |
Lippo Karawaci and Pakuwon Jati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Pakuwon Jati
The main advantage of trading using opposite Lippo Karawaci and Pakuwon Jati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Pakuwon Jati 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 Pakuwon Jati will offset losses from the drop in Pakuwon Jati'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 |
| Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Summarecon Agung Tbk | Pakuwon Jati vs. Pembangunan Perumahan PT |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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