Correlation Between Astra Agro and Greenwood Sejahtera
Can any of the company-specific risk be diversified away by investing in both Astra Agro and Greenwood Sejahtera 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 Astra Agro and Greenwood Sejahtera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Agro Lestari and Greenwood Sejahtera Tbk, you can compare the effects of market volatilities on Astra Agro and Greenwood Sejahtera 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 Astra Agro with a short position of Greenwood Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Greenwood Sejahtera.
Diversification Opportunities for Astra Agro and Greenwood Sejahtera
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Astra and Greenwood is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Greenwood Sejahtera Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenwood Sejahtera Tbk and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with Greenwood Sejahtera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenwood Sejahtera Tbk has no effect on the direction of Astra Agro i.e., Astra Agro and Greenwood Sejahtera go up and down completely randomly.
Pair Corralation between Astra Agro and Greenwood Sejahtera
Assuming the 90 days trading horizon Astra Agro Lestari is expected to under-perform the Greenwood Sejahtera. But the stock apears to be less risky and, when comparing its historical volatility, Astra Agro Lestari is 1.77 times less risky than Greenwood Sejahtera. The stock trades about -0.05 of its potential returns per unit of risk. The Greenwood Sejahtera Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,600 in Greenwood Sejahtera Tbk on November 29, 2024 and sell it today you would earn a total of 0.00 from holding Greenwood Sejahtera Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Agro Lestari vs. Greenwood Sejahtera Tbk
Performance |
| Timeline |
| Astra Agro Lestari |
| Greenwood Sejahtera Tbk |
Astra Agro and Greenwood Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and Greenwood Sejahtera
The main advantage of trading using opposite Astra Agro and Greenwood Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, Greenwood Sejahtera 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 Greenwood Sejahtera will offset losses from the drop in Greenwood Sejahtera's long position.| Astra Agro vs. Perusahaan Perkebunan London | Astra Agro vs. United Tractors Tbk | Astra Agro vs. Vale Indonesia Tbk | Astra Agro vs. Astra International Tbk |
| Greenwood Sejahtera vs. Metropolitan Land Tbk | Greenwood Sejahtera vs. Perdana Gapura Prima | Greenwood Sejahtera vs. Megapolitan Developments Tbk | Greenwood Sejahtera vs. Intiland 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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