Correlation Between Modernland Realty and Lippo Cikarang
Can any of the company-specific risk be diversified away by investing in both Modernland Realty and Lippo Cikarang 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 Modernland Realty and Lippo Cikarang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modernland Realty Ltd and Lippo Cikarang Tbk, you can compare the effects of market volatilities on Modernland Realty and Lippo Cikarang 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 Modernland Realty with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modernland Realty and Lippo Cikarang.
Diversification Opportunities for Modernland Realty and Lippo Cikarang
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Modernland and Lippo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Modernland Realty Ltd and Lippo Cikarang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Cikarang Tbk and Modernland Realty 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 Modernland Realty Ltd are associated (or correlated) with Lippo Cikarang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Cikarang Tbk has no effect on the direction of Modernland Realty i.e., Modernland Realty and Lippo Cikarang go up and down completely randomly.
Pair Corralation between Modernland Realty and Lippo Cikarang
Assuming the 90 days trading horizon Modernland Realty Ltd is expected to generate 1.49 times more return on investment than Lippo Cikarang. However, Modernland Realty is 1.49 times more volatile than Lippo Cikarang Tbk. It trades about 0.02 of its potential returns per unit of risk. Lippo Cikarang Tbk is currently generating about -0.39 per unit of risk. If you would invest 5,400 in Modernland Realty Ltd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Modernland Realty Ltd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modernland Realty Ltd vs. Lippo Cikarang Tbk
Performance |
| Timeline |
| Modernland Realty |
| Lippo Cikarang Tbk |
Modernland Realty and Lippo Cikarang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modernland Realty and Lippo Cikarang
The main advantage of trading using opposite Modernland Realty and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modernland Realty position performs unexpectedly, Lippo Cikarang 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 Lippo Cikarang will offset losses from the drop in Lippo Cikarang's long position.| Modernland Realty vs. Kawasan Industri Jababeka | Modernland Realty vs. Lippo Cikarang Tbk | Modernland Realty vs. Sentul City Tbk | Modernland Realty vs. Lippo Karawaci Tbk |
| Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Surya Semesta Internusa | Lippo Cikarang vs. Modernland Realty Ltd | Lippo Cikarang vs. Summarecon Agung 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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