Correlation Between Mitra Pinasthika and Lippo Karawaci
Can any of the company-specific risk be diversified away by investing in both Mitra Pinasthika and Lippo Karawaci 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 Mitra Pinasthika and Lippo Karawaci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitra Pinasthika Mustika and Lippo Karawaci Tbk, you can compare the effects of market volatilities on Mitra Pinasthika and Lippo Karawaci 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 Mitra Pinasthika with a short position of Lippo Karawaci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitra Pinasthika and Lippo Karawaci.
Diversification Opportunities for Mitra Pinasthika and Lippo Karawaci
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitra and Lippo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mitra Pinasthika Mustika and Lippo Karawaci Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Karawaci Tbk and Mitra Pinasthika 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 Mitra Pinasthika Mustika are associated (or correlated) with Lippo Karawaci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Karawaci Tbk has no effect on the direction of Mitra Pinasthika i.e., Mitra Pinasthika and Lippo Karawaci go up and down completely randomly.
Pair Corralation between Mitra Pinasthika and Lippo Karawaci
Assuming the 90 days trading horizon Mitra Pinasthika Mustika is expected to generate 0.14 times more return on investment than Lippo Karawaci. However, Mitra Pinasthika Mustika is 6.9 times less risky than Lippo Karawaci. It trades about -0.28 of its potential returns per unit of risk. Lippo Karawaci Tbk is currently generating about -0.24 per unit of risk. If you would invest 102,500 in Mitra Pinasthika Mustika on August 31, 2024 and sell it today you would lose (3,000) from holding Mitra Pinasthika Mustika or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitra Pinasthika Mustika vs. Lippo Karawaci Tbk
Performance |
| Timeline |
| Mitra Pinasthika Mustika |
| Lippo Karawaci Tbk |
Mitra Pinasthika and Lippo Karawaci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitra Pinasthika and Lippo Karawaci
The main advantage of trading using opposite Mitra Pinasthika and Lippo Karawaci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitra Pinasthika position performs unexpectedly, Lippo Karawaci 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 Karawaci will offset losses from the drop in Lippo Karawaci's long position.| Mitra Pinasthika vs. Saratoga Investama Sedaya | Mitra Pinasthika vs. Puradelta Lestari PT | Mitra Pinasthika vs. Cikarang Listrindo Tbk | Mitra Pinasthika vs. Erajaya Swasembada Tbk |
| Lippo Karawaci vs. Lippo Cikarang Tbk | Lippo Karawaci vs. Intiland Development Tbk | Lippo Karawaci vs. Mitra Pinasthika Mustika | Lippo Karawaci vs. Jakarta Int Hotels |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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