Correlation Between J Resources and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both J Resources 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 J Resources and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Resources Asia and Wijaya Karya Bangunan, you can compare the effects of market volatilities on J Resources 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 J Resources with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Resources and Wijaya Karya.
Diversification Opportunities for J Resources and Wijaya Karya
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PSAB and Wijaya is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding J Resources Asia 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 J Resources 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 J Resources Asia 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 J Resources i.e., J Resources and Wijaya Karya go up and down completely randomly.
Pair Corralation between J Resources and Wijaya Karya
Assuming the 90 days trading horizon J Resources Asia is expected to generate 2.0 times more return on investment than Wijaya Karya. However, J Resources is 2.0 times more volatile than Wijaya Karya Bangunan. It trades about -0.1 of its potential returns per unit of risk. Wijaya Karya Bangunan is currently generating about -0.26 per unit of risk. If you would invest 32,800 in J Resources Asia on August 29, 2024 and sell it today you would lose (2,800) from holding J Resources Asia or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Resources Asia vs. Wijaya Karya Bangunan
Performance |
| Timeline |
| J Resources Asia |
| Wijaya Karya Bangunan |
J Resources and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Resources and Wijaya Karya
The main advantage of trading using opposite J Resources and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Resources 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.| J Resources vs. Kedaung Indah Can | J Resources vs. Langgeng Makmur Industri | J Resources vs. Kabelindo Murni Tbk | J Resources vs. Mustika Ratu Tbk |
| Wijaya Karya vs. Wijaya Karya Beton | Wijaya Karya vs. Waskita Beton Precast | Wijaya Karya vs. Pembangunan Perumahan PT | Wijaya Karya vs. Puradelta Lestari 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |