Correlation Between Lippo General and Mnc Sky
Can any of the company-specific risk be diversified away by investing in both Lippo General and Mnc Sky 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 Lippo General and Mnc Sky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lippo General Insurance and Mnc Sky Vision, you can compare the effects of market volatilities on Lippo General and Mnc Sky 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 Lippo General with a short position of Mnc Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo General and Mnc Sky.
Diversification Opportunities for Lippo General and Mnc Sky
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lippo and Mnc is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lippo General Insurance and Mnc Sky Vision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Sky Vision and Lippo General 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 Lippo General Insurance are associated (or correlated) with Mnc Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Sky Vision has no effect on the direction of Lippo General i.e., Lippo General and Mnc Sky go up and down completely randomly.
Pair Corralation between Lippo General and Mnc Sky
Assuming the 90 days trading horizon Lippo General is expected to generate 4.05 times less return on investment than Mnc Sky. But when comparing it to its historical volatility, Lippo General Insurance is 1.88 times less risky than Mnc Sky. It trades about 0.03 of its potential returns per unit of risk. Mnc Sky Vision is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Mnc Sky Vision on September 25, 2024 and sell it today you would earn a total of 2,200 from holding Mnc Sky Vision or generate 44.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.21% |
Values | Daily Returns |
Lippo General Insurance vs. Mnc Sky Vision
Performance |
Timeline |
Lippo General Insurance |
Mnc Sky Vision |
Lippo General and Mnc Sky Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lippo General and Mnc Sky
The main advantage of trading using opposite Lippo General and Mnc Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo General position performs unexpectedly, Mnc Sky 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 Mnc Sky will offset losses from the drop in Mnc Sky's long position.Lippo General vs. Maskapai Reasuransi Indonesia | Lippo General vs. Panin Sekuritas Tbk | Lippo General vs. Wahana Ottomitra Multiartha | Lippo General vs. Lenox Pasifik Investama |
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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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