Correlation Between PT Lippo and Asia Pptys

Can any of the company-specific risk be diversified away by investing in both PT Lippo and Asia Pptys 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 Asia Pptys 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 Asia Pptys, you can compare the effects of market volatilities on PT Lippo and Asia Pptys 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 Asia Pptys. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Lippo and Asia Pptys.

Diversification Opportunities for PT Lippo and Asia Pptys

0.0

Correlation Coefficient

PT Lippo  Asia Pptys

Pay attention - limited upside

The 3 months correlation between PTLKF and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Lippo Karawaci and Asia Pptys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pptys 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 Asia Pptys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pptys has no effect on the direction of PT Lippo i.e., PT Lippo and Asia Pptys go up and down completely randomly.

Pair Corralation between PT Lippo and Asia Pptys

Assuming the 90 days horizon PT Lippo is expected to generate 1.51 times less return on investment than Asia Pptys. In addition to that, PT Lippo is 1.16 times more volatile than Asia Pptys. It trades about 0.06 of its total potential returns per unit of risk. Asia Pptys is currently generating about 0.1 per unit of volatility. If you would invest  2.01  in Asia Pptys on September 14, 2024 and sell it today you would earn a total of  5.89  from holding Asia Pptys or generate 293.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.26%
Values	Daily Returns

PT Lippo Karawaci  vs.  Asia Pptys

PT Lippo Karawaci

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Lippo Karawaci has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PT Lippo is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Asia Pptys

Risk-Adjusted Performance

5 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pptys are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Asia Pptys showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Lippo and Asia Pptys

The main advantage of trading using opposite PT Lippo and Asia Pptys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Lippo position performs unexpectedly, Asia Pptys 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 Asia Pptys will offset losses from the drop in Asia Pptys' long position.

The idea behind PT Lippo Karawaci and Asia Pptys pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.