Correlation Between Cikarang Listrindo and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Cikarang Listrindo 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 Cikarang Listrindo and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cikarang Listrindo Tbk and Wijaya Karya Bangunan, you can compare the effects of market volatilities on Cikarang Listrindo 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 Cikarang Listrindo with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cikarang Listrindo and Wijaya Karya.
Diversification Opportunities for Cikarang Listrindo and Wijaya Karya
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cikarang and Wijaya is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cikarang Listrindo Tbk 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 Cikarang Listrindo 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 Cikarang Listrindo Tbk 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 Cikarang Listrindo i.e., Cikarang Listrindo and Wijaya Karya go up and down completely randomly.
Pair Corralation between Cikarang Listrindo and Wijaya Karya
Assuming the 90 days trading horizon Cikarang Listrindo Tbk is expected to generate 0.33 times more return on investment than Wijaya Karya. However, Cikarang Listrindo Tbk is 3.05 times less risky than Wijaya Karya. It trades about 0.06 of its potential returns per unit of risk. Wijaya Karya Bangunan is currently generating about -0.04 per unit of risk. If you would invest 56,077 in Cikarang Listrindo Tbk on September 2, 2024 and sell it today you would earn a total of 14,923 from holding Cikarang Listrindo Tbk or generate 26.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cikarang Listrindo Tbk vs. Wijaya Karya Bangunan
Performance |
| Timeline |
| Cikarang Listrindo Tbk |
| Wijaya Karya Bangunan |
Cikarang Listrindo and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cikarang Listrindo and Wijaya Karya
The main advantage of trading using opposite Cikarang Listrindo and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cikarang Listrindo 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.| Cikarang Listrindo vs. Aneka Tambang Persero | Cikarang Listrindo vs. Bukit Asam Tbk | Cikarang Listrindo vs. Telkom Indonesia Tbk | Cikarang Listrindo vs. Astra International Tbk |
| Wijaya Karya vs. Matahari Department Store | Wijaya Karya vs. Multi Medika Internasional | Wijaya Karya vs. Visi Media Asia | Wijaya Karya vs. Bayan Resources 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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