Correlation Between Newmark and PT Lippo
Can any of the company-specific risk be diversified away by investing in both Newmark and PT Lippo 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 Newmark and PT Lippo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and PT Lippo Karawaci, you can compare the effects of market volatilities on Newmark and PT Lippo 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 Newmark with a short position of PT Lippo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and PT Lippo.
Diversification Opportunities for Newmark and PT Lippo
Pay attention - limited upside
The 3 months correlation between Newmark and PTLKF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and PT Lippo Karawaci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Lippo Karawaci and Newmark 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 Newmark Group are associated (or correlated) with PT Lippo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Lippo Karawaci has no effect on the direction of Newmark i.e., Newmark and PT Lippo go up and down completely randomly.
Pair Corralation between Newmark and PT Lippo
Given the investment horizon of 90 days Newmark is expected to generate 4.0 times less return on investment than PT Lippo. But when comparing it to its historical volatility, Newmark Group is 6.87 times less risky than PT Lippo. It trades about 0.06 of its potential returns per unit of risk. PT Lippo Karawaci is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.80 in PT Lippo Karawaci on August 27, 2024 and sell it today you would earn a total of 0.10 from holding PT Lippo Karawaci or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. PT Lippo Karawaci
Performance |
| Timeline |
| Newmark Group |
| PT Lippo Karawaci |
Newmark and PT Lippo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and PT Lippo
The main advantage of trading using opposite Newmark and PT Lippo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, PT Lippo 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 PT Lippo will offset losses from the drop in PT Lippo's long position.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| PT Lippo vs. IRSA Inversiones Y | PT Lippo vs. Anywhere Real Estate | PT Lippo vs. Newmark Group | PT Lippo vs. New York City |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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