Correlation Between Aesler Grup and Lippo General
Can any of the company-specific risk be diversified away by investing in both Aesler Grup 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 Aesler Grup and Lippo General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aesler Grup Internasional and Lippo General Insurance, you can compare the effects of market volatilities on Aesler Grup 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 Aesler Grup with a short position of Lippo General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesler Grup and Lippo General.
Diversification Opportunities for Aesler Grup and Lippo General
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aesler and Lippo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aesler Grup Internasional 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 Aesler Grup 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 Aesler Grup Internasional 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 Aesler Grup i.e., Aesler Grup and Lippo General go up and down completely randomly.
Pair Corralation between Aesler Grup and Lippo General
Assuming the 90 days trading horizon Aesler Grup Internasional is expected to generate 1.68 times more return on investment than Lippo General. However, Aesler Grup is 1.68 times more volatile than Lippo General Insurance. It trades about 0.05 of its potential returns per unit of risk. Lippo General Insurance is currently generating about -0.02 per unit of risk. If you would invest 72,000 in Aesler Grup Internasional on September 12, 2024 and sell it today you would earn a total of 28,500 from holding Aesler Grup Internasional or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.69% |
| Values | Daily Returns |
Aesler Grup Internasional vs. Lippo General Insurance
Performance |
| Timeline |
| Aesler Grup Internasional |
| Lippo General Insurance |
Aesler Grup and Lippo General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aesler Grup and Lippo General
The main advantage of trading using opposite Aesler Grup and Lippo General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesler Grup 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.| Aesler Grup vs. Siloam International Hospitals | Aesler Grup vs. Hoffmen Cleanindo | Aesler Grup vs. First Media Tbk | Aesler Grup vs. City Retail Developments |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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