Correlation Between Lippo Karawaci and Surya Citra
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Surya Citra 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 Surya Citra 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 Surya Citra Media, you can compare the effects of market volatilities on Lippo Karawaci and Surya Citra 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 Surya Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Surya Citra.
Diversification Opportunities for Lippo Karawaci and Surya Citra
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lippo and Surya is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Surya Citra Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Citra Media 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 Surya Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Citra Media has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Surya Citra go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Surya Citra
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to generate 1.37 times more return on investment than Surya Citra. However, Lippo Karawaci is 1.37 times more volatile than Surya Citra Media. It trades about 0.03 of its potential returns per unit of risk. Surya Citra Media is currently generating about -0.02 per unit of risk. If you would invest 9,100 in Lippo Karawaci Tbk on August 27, 2024 and sell it today you would earn a total of 1,800 from holding Lippo Karawaci Tbk or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Surya Citra Media
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Surya Citra Media |
Lippo Karawaci and Surya Citra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Surya Citra
The main advantage of trading using opposite Lippo Karawaci and Surya Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Surya Citra 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 Surya Citra will offset losses from the drop in Surya Citra'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 |
| Surya Citra vs. Mnc Land Tbk | Surya Citra vs. MNC Vision Networks | Surya Citra vs. Medikaloka Hermina 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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