Correlation Between Andalan Sakti and Greenwood Sejahtera
Can any of the company-specific risk be diversified away by investing in both Andalan Sakti 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 Andalan Sakti and Greenwood Sejahtera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andalan Sakti Primaindo and Greenwood Sejahtera Tbk, you can compare the effects of market volatilities on Andalan Sakti 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 Andalan Sakti with a short position of Greenwood Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andalan Sakti and Greenwood Sejahtera.
Diversification Opportunities for Andalan Sakti and Greenwood Sejahtera
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Andalan and Greenwood is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Andalan Sakti Primaindo 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 Andalan Sakti 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 Andalan Sakti Primaindo 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 Andalan Sakti i.e., Andalan Sakti and Greenwood Sejahtera go up and down completely randomly.
Pair Corralation between Andalan Sakti and Greenwood Sejahtera
Assuming the 90 days trading horizon Andalan Sakti Primaindo is expected to generate 2.38 times more return on investment than Greenwood Sejahtera. However, Andalan Sakti is 2.38 times more volatile than Greenwood Sejahtera Tbk. It trades about 0.05 of its potential returns per unit of risk. Greenwood Sejahtera Tbk is currently generating about -0.01 per unit of risk. If you would invest 9,800 in Andalan Sakti Primaindo on August 28, 2024 and sell it today you would earn a total of 9,300 from holding Andalan Sakti Primaindo or generate 94.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andalan Sakti Primaindo vs. Greenwood Sejahtera Tbk
Performance |
| Timeline |
| Andalan Sakti Primaindo |
| Greenwood Sejahtera Tbk |
Andalan Sakti and Greenwood Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andalan Sakti and Greenwood Sejahtera
The main advantage of trading using opposite Andalan Sakti and Greenwood Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andalan Sakti 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.| Andalan Sakti vs. Bumi Benowo Sukses | Andalan Sakti vs. Makmur Berkah Amanda | Andalan Sakti vs. Royalindo Investa Wijaya | Andalan Sakti vs. Cahayaputra Asa Keramik |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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