Correlation Between Nusa Raya and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Nusa Raya 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 Nusa Raya and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nusa Raya Cipta and Wijaya Karya Bangunan, you can compare the effects of market volatilities on Nusa Raya 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 Nusa Raya with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nusa Raya and Wijaya Karya.
Diversification Opportunities for Nusa Raya and Wijaya Karya
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nusa and Wijaya is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nusa Raya Cipta and Wijaya Karya Bangunan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wijaya Karya Bangunan and Nusa Raya 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 Nusa Raya Cipta 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 Bangunan has no effect on the direction of Nusa Raya i.e., Nusa Raya and Wijaya Karya go up and down completely randomly.
Pair Corralation between Nusa Raya and Wijaya Karya
Assuming the 90 days trading horizon Nusa Raya Cipta is expected to generate 0.26 times more return on investment than Wijaya Karya. However, Nusa Raya Cipta is 3.9 times less risky than Wijaya Karya. It trades about -0.17 of its potential returns per unit of risk. Wijaya Karya Bangunan is currently generating about -0.2 per unit of risk. If you would invest 35,600 in Nusa Raya Cipta on November 3, 2024 and sell it today you would lose (800.00) from holding Nusa Raya Cipta or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nusa Raya Cipta vs. Wijaya Karya Bangunan
Performance |
| Timeline |
| Nusa Raya Cipta |
| Wijaya Karya Bangunan |
Nusa Raya and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nusa Raya and Wijaya Karya
The main advantage of trading using opposite Nusa Raya and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nusa Raya 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.| Nusa Raya vs. Total Bangun Persada | Nusa Raya vs. Surya Semesta Internusa | Nusa Raya vs. Acset Indonusa Tbk | Nusa Raya vs. Mitra Pinasthika Mustika |
| Wijaya Karya vs. Wijaya Karya Beton | Wijaya Karya vs. Waskita Beton Precast | Wijaya Karya vs. Pembangunan Perumahan PT | Wijaya Karya vs. Puradelta Lestari PT |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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