Correlation Between Natura City and Greenwood Sejahtera
Can any of the company-specific risk be diversified away by investing in both Natura City 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 Natura City and Greenwood Sejahtera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura City Developments and Greenwood Sejahtera Tbk, you can compare the effects of market volatilities on Natura City 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 Natura City with a short position of Greenwood Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura City and Greenwood Sejahtera.
Diversification Opportunities for Natura City and Greenwood Sejahtera
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natura and Greenwood is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Natura City Developments 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 Natura City 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 Natura City Developments 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 Natura City i.e., Natura City and Greenwood Sejahtera go up and down completely randomly.
Pair Corralation between Natura City and Greenwood Sejahtera
Assuming the 90 days trading horizon Natura City Developments is expected to generate 3.16 times more return on investment than Greenwood Sejahtera. However, Natura City is 3.16 times more volatile than Greenwood Sejahtera Tbk. It trades about 0.1 of its potential returns per unit of risk. Greenwood Sejahtera Tbk is currently generating about -0.12 per unit of risk. If you would invest 8,800 in Natura City Developments on August 30, 2024 and sell it today you would earn a total of 3,300 from holding Natura City Developments or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natura City Developments vs. Greenwood Sejahtera Tbk
Performance |
| Timeline |
| Natura City Developments |
| Greenwood Sejahtera Tbk |
Natura City and Greenwood Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natura City and Greenwood Sejahtera
The main advantage of trading using opposite Natura City and Greenwood Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura City 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.| Natura City vs. Greenwood Sejahtera Tbk | Natura City vs. Pollux Properti Indonesia | Natura City vs. PT Cahayasakti Investindo | Natura City vs. Bekasi Asri Pemula |
| Greenwood Sejahtera vs. Metropolitan Land Tbk | Greenwood Sejahtera vs. Perdana Gapura Prima | Greenwood Sejahtera vs. Intiland Development Tbk | Greenwood Sejahtera vs. Bekasi Fajar Industrial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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