Correlation Between Bekasi Fajar and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Wijaya Karya 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 Bekasi Fajar and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bekasi Fajar Industrial and Wijaya Karya Beton, you can compare the effects of market volatilities on Bekasi Fajar and Wijaya Karya 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 Bekasi Fajar with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Wijaya Karya.
Diversification Opportunities for Bekasi Fajar and Wijaya Karya
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bekasi and Wijaya is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Wijaya Karya Beton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wijaya Karya Beton and Bekasi Fajar 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 Bekasi Fajar Industrial are associated (or correlated) with Wijaya Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wijaya Karya Beton has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Wijaya Karya go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Wijaya Karya
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to generate 1.55 times more return on investment than Wijaya Karya. However, Bekasi Fajar is 1.55 times more volatile than Wijaya Karya Beton. It trades about 0.07 of its potential returns per unit of risk. Wijaya Karya Beton is currently generating about -0.02 per unit of risk. If you would invest 10,600 in Bekasi Fajar Industrial on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Bekasi Fajar Industrial or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Wijaya Karya Beton
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Wijaya Karya Beton |
Bekasi Fajar and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Wijaya Karya
The main advantage of trading using opposite Bekasi Fajar and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Wijaya Karya 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 Wijaya Karya will offset losses from the drop in Wijaya Karya's long position.| Bekasi Fajar vs. Ciputra Development Tbk | Bekasi Fajar vs. Bumi Serpong Damai | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Lippo Karawaci Tbk |
| Wijaya Karya vs. Kedaung Indah Can | Wijaya Karya vs. Kabelindo Murni Tbk | Wijaya Karya vs. Champion Pacific Indonesia | Wijaya Karya vs. Bhuwanatala Indah Permai |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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