Correlation Between Graha Layar and Natura City
Can any of the company-specific risk be diversified away by investing in both Graha Layar and Natura City 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 Graha Layar and Natura City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graha Layar Prima and Natura City Developments, you can compare the effects of market volatilities on Graha Layar and Natura City 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 Graha Layar with a short position of Natura City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graha Layar and Natura City.
Diversification Opportunities for Graha Layar and Natura City
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Graha and Natura is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Graha Layar Prima and Natura City Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura City Developments and Graha Layar 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 Graha Layar Prima are associated (or correlated) with Natura City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura City Developments has no effect on the direction of Graha Layar i.e., Graha Layar and Natura City go up and down completely randomly.
Pair Corralation between Graha Layar and Natura City
Assuming the 90 days trading horizon Graha Layar Prima is expected to generate 0.21 times more return on investment than Natura City. However, Graha Layar Prima is 4.7 times less risky than Natura City. It trades about -0.32 of its potential returns per unit of risk. Natura City Developments is currently generating about -0.08 per unit of risk. If you would invest 220,000 in Graha Layar Prima on August 31, 2024 and sell it today you would lose (20,000) from holding Graha Layar Prima or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graha Layar Prima vs. Natura City Developments
Performance |
| Timeline |
| Graha Layar Prima |
| Natura City Developments |
Graha Layar and Natura City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graha Layar and Natura City
The main advantage of trading using opposite Graha Layar and Natura City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graha Layar position performs unexpectedly, Natura City 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 Natura City will offset losses from the drop in Natura City's long position.| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo Tbk |
| Natura City vs. Greenwood Sejahtera Tbk | Natura City vs. Pollux Properti Indonesia | Natura City vs. PT Cahayasakti Investindo | Natura City vs. Bekasi Asri Pemula |
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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