Correlation Between Bank Pan and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Bank Pan 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 Bank Pan and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pan Indonesia and Wijaya Karya Beton, you can compare the effects of market volatilities on Bank Pan 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 Bank Pan with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Wijaya Karya.
Diversification Opportunities for Bank Pan and Wijaya Karya
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Wijaya is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia 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 Bank Pan 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 Bank Pan Indonesia 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 Bank Pan i.e., Bank Pan and Wijaya Karya go up and down completely randomly.
Pair Corralation between Bank Pan and Wijaya Karya
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 1.7 times more return on investment than Wijaya Karya. However, Bank Pan is 1.7 times more volatile than Wijaya Karya Beton. It trades about 0.07 of its potential returns per unit of risk. Wijaya Karya Beton is currently generating about -0.17 per unit of risk. If you would invest 164,000 in Bank Pan Indonesia on August 28, 2024 and sell it today you would earn a total of 12,500 from holding Bank Pan Indonesia or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pan Indonesia vs. Wijaya Karya Beton
Performance |
| Timeline |
| Bank Pan Indonesia |
| Wijaya Karya Beton |
Bank Pan and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and Wijaya Karya
The main advantage of trading using opposite Bank Pan and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan 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.| Bank Pan vs. Bank Danamon Indonesia | Bank Pan vs. Bank Cimb Niaga | Bank Pan vs. Panin Financial Tbk | Bank Pan vs. Bank Maybank Indonesia |
| Wijaya Karya vs. Kedaung Indah Can | Wijaya Karya vs. Langgeng Makmur Industri | Wijaya Karya vs. Kabelindo Murni Tbk | Wijaya Karya vs. Mustika Ratu Tbk |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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