Correlation Between City Retail and Wulandari Bangun
Can any of the company-specific risk be diversified away by investing in both City Retail 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 City Retail and Wulandari Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Retail Developments and Wulandari Bangun Laksana, you can compare the effects of market volatilities on City Retail 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 City Retail with a short position of Wulandari Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Retail and Wulandari Bangun.
Diversification Opportunities for City Retail and Wulandari Bangun
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Wulandari is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding City Retail Developments 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 City Retail 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 City Retail Developments 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 City Retail i.e., City Retail and Wulandari Bangun go up and down completely randomly.
Pair Corralation between City Retail and Wulandari Bangun
Assuming the 90 days trading horizon City Retail Developments is expected to generate 0.32 times more return on investment than Wulandari Bangun. However, City Retail Developments is 3.14 times less risky than Wulandari Bangun. It trades about -0.1 of its potential returns per unit of risk. Wulandari Bangun Laksana is currently generating about -0.16 per unit of risk. If you would invest 14,000 in City Retail Developments on August 30, 2024 and sell it today you would lose (500.00) from holding City Retail Developments or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Retail Developments vs. Wulandari Bangun Laksana
Performance |
| Timeline |
| City Retail Developments |
| Wulandari Bangun Laksana |
City Retail and Wulandari Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Retail and Wulandari Bangun
The main advantage of trading using opposite City Retail and Wulandari Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Retail 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.| City Retail vs. Metropolitan Land Tbk | City Retail vs. Bekasi Fajar Industrial | City Retail vs. Greenwood Sejahtera Tbk | City Retail vs. Metropolitan Kentjana 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 Stocks Directory module to find actively traded stocks across global markets.
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