Correlation Between Lippo Karawaci and Summarecon Agung
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci and Summarecon Agung 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 Summarecon Agung 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 Summarecon Agung Tbk, you can compare the effects of market volatilities on Lippo Karawaci and Summarecon Agung 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 Summarecon Agung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Summarecon Agung.
Diversification Opportunities for Lippo Karawaci and Summarecon Agung
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lippo and Summarecon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk and Summarecon Agung Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summarecon Agung 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 Summarecon Agung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summarecon Agung Tbk has no effect on the direction of Lippo Karawaci i.e., Lippo Karawaci and Summarecon Agung go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Summarecon Agung
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to generate 1.43 times more return on investment than Summarecon Agung. However, Lippo Karawaci is 1.43 times more volatile than Summarecon Agung Tbk. It trades about 0.01 of its potential returns per unit of risk. Summarecon Agung Tbk is currently generating about -0.11 per unit of risk. If you would invest 9,500 in Lippo Karawaci Tbk on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Lippo Karawaci Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Summarecon Agung Tbk
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Summarecon Agung Tbk |
Lippo Karawaci and Summarecon Agung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Summarecon Agung
The main advantage of trading using opposite Lippo Karawaci and Summarecon Agung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci position performs unexpectedly, Summarecon Agung 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 Summarecon Agung will offset losses from the drop in Summarecon Agung'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 |
| Summarecon Agung vs. Ciputra Development Tbk | Summarecon Agung vs. Bumi Serpong Damai | Summarecon Agung vs. Alam Sutera Realty | Summarecon Agung 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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