Correlation Between Prima Andalan and Wira Global
Can any of the company-specific risk be diversified away by investing in both Prima Andalan and Wira Global 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 Prima Andalan and Wira Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prima Andalan Mandiri and Wira Global Solusi, you can compare the effects of market volatilities on Prima Andalan and Wira Global 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 Prima Andalan with a short position of Wira Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prima Andalan and Wira Global.
Diversification Opportunities for Prima Andalan and Wira Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prima and Wira is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Prima Andalan Mandiri and Wira Global Solusi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wira Global Solusi and Prima Andalan 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 Prima Andalan Mandiri are associated (or correlated) with Wira Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wira Global Solusi has no effect on the direction of Prima Andalan i.e., Prima Andalan and Wira Global go up and down completely randomly.
Pair Corralation between Prima Andalan and Wira Global
Assuming the 90 days trading horizon Prima Andalan Mandiri is expected to under-perform the Wira Global. But the stock apears to be less risky and, when comparing its historical volatility, Prima Andalan Mandiri is 2.71 times less risky than Wira Global. The stock trades about -0.16 of its potential returns per unit of risk. The Wira Global Solusi is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 9,200 in Wira Global Solusi on September 1, 2024 and sell it today you would lose (200.00) from holding Wira Global Solusi or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prima Andalan Mandiri vs. Wira Global Solusi
Performance |
| Timeline |
| Prima Andalan Mandiri |
| Wira Global Solusi |
Prima Andalan and Wira Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prima Andalan and Wira Global
The main advantage of trading using opposite Prima Andalan and Wira Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prima Andalan position performs unexpectedly, Wira Global 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 Wira Global will offset losses from the drop in Wira Global's long position.| Prima Andalan vs. Bank Artos Indonesia | Prima Andalan vs. GoTo Gojek Tokopedia | Prima Andalan vs. Elang Mahkota Teknologi | Prima Andalan vs. PT Bukalapak |
| Wira Global vs. Kioson Komersial Indonesia | Wira Global vs. Sentral Mitra Informatika | Wira Global vs. Multipolar Technology Tbk | Wira Global vs. Nusantara Voucher Distribution |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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