Correlation Between Putra Mandiri and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Putra Mandiri 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 Putra Mandiri and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putra Mandiri Jembar and Wijaya Karya Bangunan, you can compare the effects of market volatilities on Putra Mandiri 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 Putra Mandiri with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putra Mandiri and Wijaya Karya.
Diversification Opportunities for Putra Mandiri and Wijaya Karya
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putra and Wijaya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Putra Mandiri Jembar 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 Putra Mandiri 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 Putra Mandiri Jembar 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 Putra Mandiri i.e., Putra Mandiri and Wijaya Karya go up and down completely randomly.
Pair Corralation between Putra Mandiri and Wijaya Karya
Assuming the 90 days trading horizon Putra Mandiri Jembar is expected to generate 1.64 times more return on investment than Wijaya Karya. However, Putra Mandiri is 1.64 times more volatile than Wijaya Karya Bangunan. It trades about -0.01 of its potential returns per unit of risk. Wijaya Karya Bangunan is currently generating about -0.46 per unit of risk. If you would invest 12,400 in Putra Mandiri Jembar on September 19, 2024 and sell it today you would lose (100.00) from holding Putra Mandiri Jembar or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putra Mandiri Jembar vs. Wijaya Karya Bangunan
Performance |
| Timeline |
| Putra Mandiri Jembar |
| Wijaya Karya Bangunan |
Putra Mandiri and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putra Mandiri and Wijaya Karya
The main advantage of trading using opposite Putra Mandiri and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putra Mandiri 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.| Putra Mandiri vs. MNC Studios International | Putra Mandiri vs. Jaya Sukses Makmur | Putra Mandiri vs. Mitrabara Adiperdana PT | Putra Mandiri vs. PT Multi Garam |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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