Correlation Between FrontView REIT, and Lippo Cikarang

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

By analyzing existing cross correlation between FrontView REIT, and Lippo Cikarang Tbk, you can compare the effects of market volatilities on FrontView REIT, 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 FrontView REIT, with a short position of Lippo Cikarang. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Lippo Cikarang.

Diversification Opportunities for FrontView REIT, and Lippo Cikarang

-0.13

Correlation Coefficient

FrontView REIT,  Lippo Cikarang

Good diversification

The 3 months correlation between FrontView and Lippo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, 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 FrontView REIT, 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 FrontView REIT, 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 FrontView REIT, i.e., FrontView REIT, and Lippo Cikarang go up and down completely randomly.

Pair Corralation between FrontView REIT, and Lippo Cikarang

Considering the 90-day investment horizon FrontView REIT, is expected to generate 0.51 times more return on investment than Lippo Cikarang. However, FrontView REIT, is 1.95 times less risky than Lippo Cikarang. It trades about -0.02 of its potential returns per unit of risk. Lippo Cikarang Tbk is currently generating about -0.38 per unit of risk. If you would invest  1,922  in FrontView REIT, on September 19, 2024 and sell it today you would lose (26.00) from holding FrontView REIT, or give up 1.35% of portfolio value over 90 days.

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

FrontView REIT,  vs.  Lippo Cikarang Tbk

FrontView REIT,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FrontView REIT, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Lippo Cikarang Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lippo Cikarang Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with FrontView REIT, and Lippo Cikarang

The main advantage of trading using opposite FrontView REIT, and Lippo Cikarang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FrontView REIT, 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.

The idea behind FrontView REIT, and Lippo Cikarang Tbk 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.