Correlation Between Bumi Benowo and Greenwood Sejahtera
Can any of the company-specific risk be diversified away by investing in both Bumi Benowo 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 Bumi Benowo and Greenwood Sejahtera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Benowo Sukses and Greenwood Sejahtera Tbk, you can compare the effects of market volatilities on Bumi Benowo 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 Bumi Benowo with a short position of Greenwood Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Benowo and Greenwood Sejahtera.
Diversification Opportunities for Bumi Benowo and Greenwood Sejahtera
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bumi and Greenwood is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Benowo Sukses 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 Bumi Benowo 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 Bumi Benowo Sukses 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 Bumi Benowo i.e., Bumi Benowo and Greenwood Sejahtera go up and down completely randomly.
Pair Corralation between Bumi Benowo and Greenwood Sejahtera
Assuming the 90 days trading horizon Bumi Benowo Sukses is expected to under-perform the Greenwood Sejahtera. In addition to that, Bumi Benowo is 2.67 times more volatile than Greenwood Sejahtera Tbk. It trades about -0.11 of its total potential returns per unit of risk. Greenwood Sejahtera Tbk is currently generating about -0.16 per unit of volatility. If you would invest 13,800 in Greenwood Sejahtera Tbk on August 27, 2024 and sell it today you would lose (600.00) from holding Greenwood Sejahtera Tbk or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bumi Benowo Sukses vs. Greenwood Sejahtera Tbk
Performance |
| Timeline |
| Bumi Benowo Sukses |
| Greenwood Sejahtera Tbk |
Bumi Benowo and Greenwood Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Benowo and Greenwood Sejahtera
The main advantage of trading using opposite Bumi Benowo and Greenwood Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Benowo 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.| Bumi Benowo vs. Indo Kordsa Tbk | Bumi Benowo vs. Wilmar Cahaya Indonesia | Bumi Benowo vs. Citra Marga Nusaphala | Bumi Benowo vs. Darya Varia Laboratoria 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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