Correlation Between Pakuwon Jati and Lippo Karawaci
Can any of the company-specific risk be diversified away by investing in both Pakuwon Jati 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 Pakuwon Jati and Lippo Karawaci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pakuwon Jati Tbk and Lippo Karawaci Tbk, you can compare the effects of market volatilities on Pakuwon Jati 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 Pakuwon Jati with a short position of Lippo Karawaci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakuwon Jati and Lippo Karawaci.
Diversification Opportunities for Pakuwon Jati and Lippo Karawaci
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pakuwon and Lippo is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pakuwon Jati Tbk 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 Pakuwon Jati 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 Pakuwon Jati Tbk 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 Pakuwon Jati i.e., Pakuwon Jati and Lippo Karawaci go up and down completely randomly.
Pair Corralation between Pakuwon Jati and Lippo Karawaci
Assuming the 90 days trading horizon Pakuwon Jati Tbk is expected to generate 0.79 times more return on investment than Lippo Karawaci. However, Pakuwon Jati Tbk is 1.26 times less risky than Lippo Karawaci. It trades about -0.06 of its potential returns per unit of risk. Lippo Karawaci Tbk is currently generating about -0.28 per unit of risk. If you would invest 40,200 in Pakuwon Jati Tbk on November 3, 2024 and sell it today you would lose (1,000.00) from holding Pakuwon Jati Tbk or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakuwon Jati Tbk vs. Lippo Karawaci Tbk
Performance |
| Timeline |
| Pakuwon Jati Tbk |
| Lippo Karawaci Tbk |
Pakuwon Jati and Lippo Karawaci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakuwon Jati and Lippo Karawaci
The main advantage of trading using opposite Pakuwon Jati and Lippo Karawaci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakuwon Jati 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.| Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Summarecon Agung Tbk | Pakuwon Jati vs. Pembangunan Perumahan PT |
| Lippo Karawaci vs. Bumi Serpong Damai | Lippo Karawaci vs. Alam Sutera Realty | Lippo Karawaci vs. Summarecon Agung Tbk | Lippo Karawaci vs. Ciputra Development Tbk |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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