Correlation Between Bekasi Fajar and Lippo Karawaci
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar 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 Bekasi Fajar and Lippo Karawaci 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 Karawaci Tbk, you can compare the effects of market volatilities on Bekasi Fajar 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 Bekasi Fajar with a short position of Lippo Karawaci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Lippo Karawaci.
Diversification Opportunities for Bekasi Fajar and Lippo Karawaci
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bekasi and Lippo is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial 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 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 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 Bekasi Fajar i.e., Bekasi Fajar and Lippo Karawaci go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Lippo Karawaci
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to generate 0.65 times more return on investment than Lippo Karawaci. However, Bekasi Fajar Industrial is 1.53 times less risky than Lippo Karawaci. It trades about -0.12 of its potential returns per unit of risk. Lippo Karawaci Tbk is currently generating about -0.1 per unit of risk. If you would invest 10,100 in Bekasi Fajar Industrial on December 29, 2024 and sell it today you would lose (1,500) from holding Bekasi Fajar Industrial or give up 14.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bekasi Fajar Industrial vs. Lippo Karawaci Tbk
Performance |
Timeline |
Bekasi Fajar Industrial |
Lippo Karawaci Tbk |
Bekasi Fajar and Lippo Karawaci Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bekasi Fajar and Lippo Karawaci
The main advantage of trading using opposite Bekasi Fajar and Lippo Karawaci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar 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.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 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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