Correlation Between Perusahaan Gas and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas 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 Perusahaan Gas and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Wijaya Karya Beton, you can compare the effects of market volatilities on Perusahaan Gas 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 Perusahaan Gas with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Wijaya Karya.
Diversification Opportunities for Perusahaan Gas and Wijaya Karya
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perusahaan and Wijaya is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara 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 Perusahaan Gas 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 Perusahaan Gas Negara 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 Perusahaan Gas i.e., Perusahaan Gas and Wijaya Karya go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Wijaya Karya
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 0.36 times more return on investment than Wijaya Karya. However, Perusahaan Gas Negara is 2.78 times less risky than Wijaya Karya. It trades about 0.05 of its potential returns per unit of risk. Wijaya Karya Beton is currently generating about -0.02 per unit of risk. If you would invest 110,334 in Perusahaan Gas Negara on December 10, 2024 and sell it today you would earn a total of 40,166 from holding Perusahaan Gas Negara or generate 36.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Wijaya Karya Beton
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Wijaya Karya Beton |
Perusahaan Gas and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Wijaya Karya
The main advantage of trading using opposite Perusahaan Gas and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas 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.| Perusahaan Gas vs. Aneka Tambang Persero | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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