Correlation Between Pudjiadi Sons and Wira Global
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons and Wira Global 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 Pudjiadi Sons and Wira Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and Wira Global Solusi, you can compare the effects of market volatilities on Pudjiadi Sons and Wira Global 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 Pudjiadi Sons with a short position of Wira Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and Wira Global.
Diversification Opportunities for Pudjiadi Sons and Wira Global
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pudjiadi and Wira is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk and Wira Global Solusi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wira Global Solusi and Pudjiadi Sons 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 Pudjiadi Sons Tbk are associated (or correlated) with Wira Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wira Global Solusi has no effect on the direction of Pudjiadi Sons i.e., Pudjiadi Sons and Wira Global go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and Wira Global
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 5.69 times more return on investment than Wira Global. However, Pudjiadi Sons is 5.69 times more volatile than Wira Global Solusi. It trades about 0.32 of its potential returns per unit of risk. Wira Global Solusi is currently generating about -0.08 per unit of risk. If you would invest 45,200 in Pudjiadi Sons Tbk on August 30, 2024 and sell it today you would earn a total of 90,800 from holding Pudjiadi Sons Tbk or generate 200.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. Wira Global Solusi
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| Wira Global Solusi |
Pudjiadi Sons and Wira Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and Wira Global
The main advantage of trading using opposite Pudjiadi Sons and Wira Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons position performs unexpectedly, Wira Global 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 Wira Global will offset losses from the drop in Wira Global's long position.| Pudjiadi Sons vs. Pembangunan Jaya Ancol | Pudjiadi Sons vs. Panorama Sentrawisata Tbk | Pudjiadi Sons vs. Millennium Pharmacon International | Pudjiadi Sons vs. Tempo Inti Media |
| Wira Global vs. Trimegah Karya Pratama | Wira Global vs. Global Sukses Solusi | Wira Global vs. Jaya Swarasa Agung | Wira Global vs. RMK Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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