Correlation Between Champion Pacific and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Champion Pacific 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 Champion Pacific and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Pacific Indonesia and Wijaya Karya Beton, you can compare the effects of market volatilities on Champion Pacific 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 Champion Pacific with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Wijaya Karya.
Diversification Opportunities for Champion Pacific and Wijaya Karya
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Wijaya is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific Indonesia 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 Champion Pacific 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 Champion Pacific Indonesia 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 Champion Pacific i.e., Champion Pacific and Wijaya Karya go up and down completely randomly.
Pair Corralation between Champion Pacific and Wijaya Karya
Assuming the 90 days trading horizon Champion Pacific Indonesia is expected to generate 0.37 times more return on investment than Wijaya Karya. However, Champion Pacific Indonesia is 2.71 times less risky than Wijaya Karya. It trades about 0.06 of its potential returns per unit of risk. Wijaya Karya Beton is currently generating about -0.01 per unit of risk. If you would invest 43,800 in Champion Pacific Indonesia on September 12, 2024 and sell it today you would earn a total of 7,200 from holding Champion Pacific Indonesia or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Wijaya Karya Beton
Performance |
| Timeline |
| Champion Pacific Ind |
| Wijaya Karya Beton |
Champion Pacific and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Wijaya Karya
The main advantage of trading using opposite Champion Pacific and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific 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.| Champion Pacific vs. Intanwijaya Internasional Tbk | Champion Pacific vs. Asiaplast Industries Tbk | Champion Pacific vs. Trias Sentosa Tbk | Champion Pacific vs. Lotte Chemical Titan |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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