Correlation Between Bekasi Fajar and Lippo Cikarang
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Lippo Cikarang 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 Bekasi Fajar and Lippo Cikarang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bekasi Fajar Industrial and Lippo Cikarang Tbk, you can compare the effects of market volatilities on Bekasi Fajar and Lippo Cikarang 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 Bekasi Fajar with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Lippo Cikarang.
Diversification Opportunities for Bekasi Fajar and Lippo Cikarang
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bekasi and Lippo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Lippo Cikarang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Cikarang Tbk and Bekasi Fajar 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 Bekasi Fajar Industrial are associated (or correlated) with Lippo Cikarang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Cikarang Tbk has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Lippo Cikarang go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Lippo Cikarang
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Lippo Cikarang. But the stock apears to be less risky and, when comparing its historical volatility, Bekasi Fajar Industrial is 1.41 times less risky than Lippo Cikarang. The stock trades about -0.12 of its potential returns per unit of risk. The Lippo Cikarang Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 51,000 in Lippo Cikarang Tbk on December 29, 2024 and sell it today you would lose (3,600) from holding Lippo Cikarang Tbk or give up 7.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bekasi Fajar Industrial vs. Lippo Cikarang Tbk
Performance |
Timeline |
Bekasi Fajar Industrial |
Lippo Cikarang Tbk |
Bekasi Fajar and Lippo Cikarang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bekasi Fajar and Lippo Cikarang
The main advantage of trading using opposite Bekasi Fajar and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Lippo Cikarang 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 Cikarang will offset losses from the drop in Lippo Cikarang's long position.Bekasi Fajar vs. Agung Podomoro Land | Bekasi Fajar vs. Surya Semesta Internusa | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai |
Lippo Cikarang vs. Lippo Karawaci Tbk | Lippo Cikarang vs. Surya Semesta Internusa | Lippo Cikarang vs. Modernland Realty Ltd | Lippo Cikarang vs. Summarecon Agung 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |