Correlation Between Lippo Karawaci and Greenwood Sejahtera
Can any of the company-specific risk be diversified away by investing in both Lippo Karawaci 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 Lippo Karawaci and Greenwood Sejahtera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lippo Karawaci Tbk and Greenwood Sejahtera Tbk, you can compare the effects of market volatilities on Lippo Karawaci 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 Lippo Karawaci with a short position of Greenwood Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lippo Karawaci and Greenwood Sejahtera.
Diversification Opportunities for Lippo Karawaci and Greenwood Sejahtera
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lippo and Greenwood is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lippo Karawaci Tbk 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 Lippo Karawaci 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 Lippo Karawaci Tbk 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 Lippo Karawaci i.e., Lippo Karawaci and Greenwood Sejahtera go up and down completely randomly.
Pair Corralation between Lippo Karawaci and Greenwood Sejahtera
Assuming the 90 days trading horizon Lippo Karawaci Tbk is expected to generate 2.21 times more return on investment than Greenwood Sejahtera. However, Lippo Karawaci is 2.21 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 -0.04 per unit of risk. If you would invest 8,300 in Lippo Karawaci Tbk on September 2, 2024 and sell it today you would earn a total of 2,400 from holding Lippo Karawaci Tbk or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lippo Karawaci Tbk vs. Greenwood Sejahtera Tbk
Performance |
| Timeline |
| Lippo Karawaci Tbk |
| Greenwood Sejahtera Tbk |
Lippo Karawaci and Greenwood Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lippo Karawaci and Greenwood Sejahtera
The main advantage of trading using opposite Lippo Karawaci and Greenwood Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lippo Karawaci 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.| Lippo Karawaci vs. Bumi Serpong Damai | Lippo Karawaci vs. Alam Sutera Realty | Lippo Karawaci vs. Summarecon Agung Tbk | Lippo Karawaci vs. Ciputra Development Tbk |
| Greenwood Sejahtera vs. Lippo Karawaci Tbk | Greenwood Sejahtera vs. Mitra Pinasthika Mustika | Greenwood Sejahtera vs. Jakarta Int Hotels | Greenwood Sejahtera vs. Indosterling Technomedia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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