Correlation Between Equity Development and Wulandari Bangun
Can any of the company-specific risk be diversified away by investing in both Equity Development and Wulandari Bangun 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 Equity Development and Wulandari Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Development Investment and Wulandari Bangun Laksana, you can compare the effects of market volatilities on Equity Development and Wulandari Bangun 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 Equity Development with a short position of Wulandari Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Development and Wulandari Bangun.
Diversification Opportunities for Equity Development and Wulandari Bangun
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equity and Wulandari is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Equity Development Investment and Wulandari Bangun Laksana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wulandari Bangun Laksana and Equity Development 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 Equity Development Investment are associated (or correlated) with Wulandari Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wulandari Bangun Laksana has no effect on the direction of Equity Development i.e., Equity Development and Wulandari Bangun go up and down completely randomly.
Pair Corralation between Equity Development and Wulandari Bangun
Assuming the 90 days trading horizon Equity Development Investment is expected to generate 1.35 times more return on investment than Wulandari Bangun. However, Equity Development is 1.35 times more volatile than Wulandari Bangun Laksana. It trades about -0.04 of its potential returns per unit of risk. Wulandari Bangun Laksana is currently generating about -0.28 per unit of risk. If you would invest 5,900 in Equity Development Investment on August 30, 2024 and sell it today you would lose (200.00) from holding Equity Development Investment or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Development Investment vs. Wulandari Bangun Laksana
Performance |
| Timeline |
| Equity Development |
| Wulandari Bangun Laksana |
Equity Development and Wulandari Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Development and Wulandari Bangun
The main advantage of trading using opposite Equity Development and Wulandari Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Development position performs unexpectedly, Wulandari Bangun 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 Wulandari Bangun will offset losses from the drop in Wulandari Bangun's long position.| Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang Tbk |
| Wulandari Bangun vs. HK Metals Utama | Wulandari Bangun vs. Fast Food Indonesia | Wulandari Bangun vs. Garuda Metalindo Tbk | Wulandari Bangun vs. Equity Development Investment |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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