Correlation Between Greenwood Sejahtera and Lippo Karawaci
Can any of the company-specific risk be diversified away by investing in both Greenwood Sejahtera and Lippo Karawaci 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 Greenwood Sejahtera and Lippo Karawaci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenwood Sejahtera Tbk and Lippo Karawaci Tbk, you can compare the effects of market volatilities on Greenwood Sejahtera and Lippo Karawaci 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 Greenwood Sejahtera with a short position of Lippo Karawaci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenwood Sejahtera and Lippo Karawaci.
Diversification Opportunities for Greenwood Sejahtera and Lippo Karawaci
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Greenwood and Lippo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Greenwood Sejahtera Tbk and Lippo Karawaci Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo Karawaci Tbk and Greenwood Sejahtera 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 Greenwood Sejahtera Tbk are associated (or correlated) with Lippo Karawaci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo Karawaci Tbk has no effect on the direction of Greenwood Sejahtera i.e., Greenwood Sejahtera and Lippo Karawaci go up and down completely randomly.
Pair Corralation between Greenwood Sejahtera and Lippo Karawaci
Assuming the 90 days trading horizon Greenwood Sejahtera Tbk is expected to generate 0.35 times more return on investment than Lippo Karawaci. However, Greenwood Sejahtera Tbk is 2.83 times less risky than Lippo Karawaci. It trades about -0.12 of its potential returns per unit of risk. Lippo Karawaci Tbk is currently generating about -0.15 per unit of risk. If you would invest 13,500 in Greenwood Sejahtera Tbk on September 2, 2024 and sell it today you would lose (400.00) from holding Greenwood Sejahtera Tbk or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenwood Sejahtera Tbk vs. Lippo Karawaci Tbk
Performance |
| Timeline |
| Greenwood Sejahtera Tbk |
| Lippo Karawaci Tbk |
Greenwood Sejahtera and Lippo Karawaci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenwood Sejahtera and Lippo Karawaci
The main advantage of trading using opposite Greenwood Sejahtera and Lippo Karawaci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenwood Sejahtera position performs unexpectedly, Lippo Karawaci 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 Lippo Karawaci will offset losses from the drop in Lippo Karawaci's long position.| Greenwood Sejahtera vs. Lippo Karawaci Tbk | Greenwood Sejahtera vs. Mitra Pinasthika Mustika | Greenwood Sejahtera vs. Jakarta Int Hotels | Greenwood Sejahtera vs. Indosterling Technomedia Tbk |
| Lippo Karawaci vs. Bumi Serpong Damai | Lippo Karawaci vs. Alam Sutera Realty | Lippo Karawaci vs. Summarecon Agung Tbk | Lippo Karawaci vs. Ciputra 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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