Correlation Between PT Lippo and Kallo
Can any of the company-specific risk be diversified away by investing in both PT Lippo and Kallo 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 PT Lippo and Kallo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Lippo Karawaci and Kallo Inc, you can compare the effects of market volatilities on PT Lippo and Kallo 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 PT Lippo with a short position of Kallo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Lippo and Kallo.
Diversification Opportunities for PT Lippo and Kallo
No risk reduction
The 3 months correlation between PTLKF and Kallo is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Lippo Karawaci and Kallo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kallo Inc and PT Lippo 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 PT Lippo Karawaci are associated (or correlated) with Kallo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kallo Inc has no effect on the direction of PT Lippo i.e., PT Lippo and Kallo go up and down completely randomly.
Pair Corralation between PT Lippo and Kallo
Assuming the 90 days horizon PT Lippo Karawaci is expected to generate 5.2 times more return on investment than Kallo. However, PT Lippo is 5.2 times more volatile than Kallo Inc. It trades about 0.03 of its potential returns per unit of risk. Kallo Inc is currently generating about -0.05 per unit of risk. If you would invest 0.80 in PT Lippo Karawaci on October 21, 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 | Moves Together |
| Strength | Very Strong |
| Accuracy | 91.53% |
| Values | Daily Returns |
PT Lippo Karawaci vs. Kallo Inc
Performance |
| Timeline |
| PT Lippo Karawaci |
| Kallo Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Lippo and Kallo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Lippo and Kallo
The main advantage of trading using opposite PT Lippo and Kallo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Lippo position performs unexpectedly, Kallo 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 Kallo will offset losses from the drop in Kallo's long position.| PT Lippo vs. United Fire Group | PT Lippo vs. Canlan Ice Sports | PT Lippo vs. Old Republic International | PT Lippo vs. TFI International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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