Correlation Between Metrodata Electronics and Lippo General
Can any of the company-specific risk be diversified away by investing in both Metrodata Electronics 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 Metrodata Electronics and Lippo General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrodata Electronics Tbk and Lippo General Insurance, you can compare the effects of market volatilities on Metrodata Electronics 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 Metrodata Electronics with a short position of Lippo General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrodata Electronics and Lippo General.
Diversification Opportunities for Metrodata Electronics and Lippo General
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metrodata and Lippo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Metrodata Electronics Tbk 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 Metrodata Electronics 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 Metrodata Electronics Tbk 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 Metrodata Electronics i.e., Metrodata Electronics and Lippo General go up and down completely randomly.
Pair Corralation between Metrodata Electronics and Lippo General
Assuming the 90 days trading horizon Metrodata Electronics is expected to generate 38.64 times less return on investment than Lippo General. But when comparing it to its historical volatility, Metrodata Electronics Tbk is 25.26 times less risky than Lippo General. It trades about 0.03 of its potential returns per unit of risk. Lippo General Insurance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 57,029 in Lippo General Insurance on September 2, 2024 and sell it today you would lose (20,229) from holding Lippo General Insurance or give up 35.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrodata Electronics Tbk vs. Lippo General Insurance
Performance |
| Timeline |
| Metrodata Electronics Tbk |
| Lippo General Insurance |
Metrodata Electronics and Lippo General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrodata Electronics and Lippo General
The main advantage of trading using opposite Metrodata Electronics and Lippo General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrodata Electronics 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.| Metrodata Electronics vs. Multipolar Tbk | Metrodata Electronics vs. Astra Graphia Tbk | Metrodata Electronics vs. Matahari Putra Prima | Metrodata Electronics vs. Ramayana Lestari Sentosa |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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