Correlation Between Global Mediacom and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Global Mediacom 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 Global Mediacom and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Mediacom Tbk and Wijaya Karya Beton, you can compare the effects of market volatilities on Global Mediacom 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 Global Mediacom with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Mediacom and Wijaya Karya.
Diversification Opportunities for Global Mediacom and Wijaya Karya
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Wijaya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Global Mediacom Tbk 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 Global Mediacom 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 Global Mediacom Tbk 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 Global Mediacom i.e., Global Mediacom and Wijaya Karya go up and down completely randomly.
Pair Corralation between Global Mediacom and Wijaya Karya
Assuming the 90 days trading horizon Global Mediacom Tbk is expected to under-perform the Wijaya Karya. In addition to that, Global Mediacom is 1.56 times more volatile than Wijaya Karya Beton. It trades about -0.07 of its total potential returns per unit of risk. Wijaya Karya Beton is currently generating about 0.01 per unit of volatility. If you would invest 20,400 in Wijaya Karya Beton on December 9, 2024 and sell it today you would earn a total of 0.00 from holding Wijaya Karya Beton or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Mediacom Tbk vs. Wijaya Karya Beton
Performance |
| Timeline |
| Global Mediacom Tbk |
| Wijaya Karya Beton |
Global Mediacom and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Mediacom and Wijaya Karya
The main advantage of trading using opposite Global Mediacom and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Mediacom 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.| Global Mediacom vs. Media Nusantara Citra | ||
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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 CEOs Directory module to screen CEOs from public companies around the world.
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