Correlation Between Greenwood Sejahtera and Metropolitan Land
Can any of the company-specific risk be diversified away by investing in both Greenwood Sejahtera and Metropolitan Land 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 Metropolitan Land 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 Metropolitan Land Tbk, you can compare the effects of market volatilities on Greenwood Sejahtera and Metropolitan Land 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 Metropolitan Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenwood Sejahtera and Metropolitan Land.
Diversification Opportunities for Greenwood Sejahtera and Metropolitan Land
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greenwood and Metropolitan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Greenwood Sejahtera Tbk and Metropolitan Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Land 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 Metropolitan Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Land Tbk has no effect on the direction of Greenwood Sejahtera i.e., Greenwood Sejahtera and Metropolitan Land go up and down completely randomly.
Pair Corralation between Greenwood Sejahtera and Metropolitan Land
Assuming the 90 days trading horizon Greenwood Sejahtera Tbk is expected to under-perform the Metropolitan Land. In addition to that, Greenwood Sejahtera is 1.86 times more volatile than Metropolitan Land Tbk. It trades about -0.2 of its total potential returns per unit of risk. Metropolitan Land Tbk is currently generating about -0.03 per unit of volatility. If you would invest 38,800 in Metropolitan Land Tbk on February 8, 2024 and sell it today you would lose (400.00) from holding Metropolitan Land Tbk or give up 1.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Greenwood Sejahtera Tbk vs. Metropolitan Land Tbk
Performance |
Timeline |
Greenwood Sejahtera Tbk |
Metropolitan Land Tbk |
Greenwood Sejahtera and Metropolitan Land Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Greenwood Sejahtera and Metropolitan Land
The main advantage of trading using opposite Greenwood Sejahtera and Metropolitan Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenwood Sejahtera position performs unexpectedly, Metropolitan Land 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 Metropolitan Land will offset losses from the drop in Metropolitan Land's long position.Greenwood Sejahtera vs. Jaya Real Property | Greenwood Sejahtera vs. Intiland Development Tbk | Greenwood Sejahtera vs. Modernland Realty Ltd | Greenwood Sejahtera vs. Lippo Cikarang Tbk |
Metropolitan Land vs. Jaya Real Property | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Modernland Realty Ltd | Metropolitan Land vs. Lippo Cikarang 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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