Correlation Between Freedom Holding and PT Lippo

Can any of the company-specific risk be diversified away by investing in both Freedom Holding and PT Lippo 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 Freedom Holding and PT Lippo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Freedom Holding Corp and PT Lippo Karawaci, you can compare the effects of market volatilities on Freedom Holding and PT Lippo 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 Freedom Holding with a short position of PT Lippo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and PT Lippo.

Diversification Opportunities for Freedom Holding and PT Lippo

0.0

Correlation Coefficient

Freedom Holding  PT Lippo

Pay attention - limited upside

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

Pair Corralation between Freedom Holding and PT Lippo

If you would invest  9,506  in Freedom Holding Corp on September 26, 2024 and sell it today you would earn a total of  3,386  from holding Freedom Holding Corp or generate 35.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Freedom Holding Corp  vs.  PT Lippo Karawaci

Freedom Holding Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Freedom Holding and PT Lippo

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

The idea behind Freedom Holding Corp and PT Lippo Karawaci 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.