Correlation Between Mustika Ratu and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Mustika Ratu 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 Mustika Ratu and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustika Ratu Tbk and Wijaya Karya Beton, you can compare the effects of market volatilities on Mustika Ratu 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 Mustika Ratu with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustika Ratu and Wijaya Karya.
Diversification Opportunities for Mustika Ratu and Wijaya Karya
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mustika and Wijaya is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu i.e., Mustika Ratu and Wijaya Karya go up and down completely randomly.
Pair Corralation between Mustika Ratu and Wijaya Karya
Assuming the 90 days trading horizon Mustika Ratu Tbk is expected to generate 1.16 times more return on investment than Wijaya Karya. However, Mustika Ratu is 1.16 times more volatile than Wijaya Karya Beton. It trades about -0.02 of its potential returns per unit of risk. Wijaya Karya Beton is currently generating about -0.03 per unit of risk. If you would invest 51,000 in Mustika Ratu Tbk on August 31, 2024 and sell it today you would lose (19,000) from holding Mustika Ratu Tbk or give up 37.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Mustika Ratu Tbk vs. Wijaya Karya Beton
Performance |
| Timeline |
| Mustika Ratu Tbk |
| Wijaya Karya Beton |
Mustika Ratu and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustika Ratu and Wijaya Karya
The main advantage of trading using opposite Mustika Ratu and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustika Ratu 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.| Mustika Ratu vs. Pyridam Farma Tbk | Mustika Ratu vs. Mandom Indonesia Tbk | Mustika Ratu vs. Langgeng Makmur Industri | Mustika Ratu vs. Merck Tbk |
| Wijaya Karya vs. Perusahaan Gas Negara | Wijaya Karya vs. Vale Indonesia Tbk | Wijaya Karya vs. Telkom Indonesia Tbk | Wijaya Karya vs. Mitra Pinasthika Mustika |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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