Correlation Between GM and Waskita Karya
Can any of the company-specific risk be diversified away by investing in both GM and Waskita 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 GM and Waskita Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Waskita Karya Persero, you can compare the effects of market volatilities on GM and Waskita 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 GM with a short position of Waskita Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Waskita Karya.
Diversification Opportunities for GM and Waskita Karya
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Waskita is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Waskita Karya Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waskita Karya Persero and GM 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 General Motors are associated (or correlated) with Waskita Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waskita Karya Persero has no effect on the direction of GM i.e., GM and Waskita Karya go up and down completely randomly.
Pair Corralation between GM and Waskita Karya
If you would invest 3,536 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,023 from holding General Motors or generate 57.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.72% |
| Values | Daily Returns |
General Motors vs. Waskita Karya Persero
Performance |
| Timeline |
| General Motors |
| Waskita Karya Persero |
GM and Waskita Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Waskita Karya
The main advantage of trading using opposite GM and Waskita Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Waskita 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 Waskita Karya will offset losses from the drop in Waskita Karya's long position.The idea behind General Motors and Waskita Karya Persero pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Waskita Karya vs. Matahari Department Store | Waskita Karya vs. Multi Medika Internasional | Waskita Karya vs. Visi Media Asia | Waskita Karya vs. Bayan Resources 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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