Correlation Between Maskapai Reasuransi and Lippo General
Can any of the company-specific risk be diversified away by investing in both Maskapai Reasuransi and Lippo General 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 Maskapai Reasuransi and Lippo General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maskapai Reasuransi Indonesia and Lippo General Insurance, you can compare the effects of market volatilities on Maskapai Reasuransi and Lippo General 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 Maskapai Reasuransi with a short position of Lippo General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maskapai Reasuransi and Lippo General.
Diversification Opportunities for Maskapai Reasuransi and Lippo General
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maskapai and Lippo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Maskapai Reasuransi Indonesia and Lippo General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo General Insurance and Maskapai Reasuransi 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 Maskapai Reasuransi Indonesia are associated (or correlated) with Lippo General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo General Insurance has no effect on the direction of Maskapai Reasuransi i.e., Maskapai Reasuransi and Lippo General go up and down completely randomly.
Pair Corralation between Maskapai Reasuransi and Lippo General
Assuming the 90 days trading horizon Maskapai Reasuransi Indonesia is expected to under-perform the Lippo General. But the stock apears to be less risky and, when comparing its historical volatility, Maskapai Reasuransi Indonesia is 3.17 times less risky than Lippo General. The stock trades about -0.12 of its potential returns per unit of risk. The Lippo General Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 35,800 in Lippo General Insurance on August 28, 2024 and sell it today you would earn a total of 800.00 from holding Lippo General Insurance or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maskapai Reasuransi Indonesia vs. Lippo General Insurance
Performance |
| Timeline |
| Maskapai Reasuransi |
| Lippo General Insurance |
Maskapai Reasuransi and Lippo General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maskapai Reasuransi and Lippo General
The main advantage of trading using opposite Maskapai Reasuransi and Lippo General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maskapai Reasuransi position performs unexpectedly, Lippo General 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 General will offset losses from the drop in Lippo General's long position.| Maskapai Reasuransi vs. Lippo General Insurance | Maskapai Reasuransi vs. Paninvest Tbk | Maskapai Reasuransi vs. Mandala Multifinance Tbk | Maskapai Reasuransi vs. Bank Mayapada Internasional |
| Lippo General vs. Maskapai Reasuransi Indonesia | Lippo General vs. Lenox Pasifik Investama | Lippo General vs. Paninvest Tbk | Lippo General vs. Bank Mayapada Internasional |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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