Correlation Between Semen Indonesia and Waskita Beton
Can any of the company-specific risk be diversified away by investing in both Semen Indonesia and Waskita Beton 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 Semen Indonesia and Waskita Beton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semen Indonesia Persero and Waskita Beton Precast, you can compare the effects of market volatilities on Semen Indonesia and Waskita Beton 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 Semen Indonesia with a short position of Waskita Beton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Indonesia and Waskita Beton.
Diversification Opportunities for Semen Indonesia and Waskita Beton
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Semen and Waskita is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Semen Indonesia Persero and Waskita Beton Precast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waskita Beton Precast and Semen Indonesia 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 Semen Indonesia Persero are associated (or correlated) with Waskita Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waskita Beton Precast has no effect on the direction of Semen Indonesia i.e., Semen Indonesia and Waskita Beton go up and down completely randomly.
Pair Corralation between Semen Indonesia and Waskita Beton
Assuming the 90 days trading horizon Semen Indonesia Persero is expected to generate 0.57 times more return on investment than Waskita Beton. However, Semen Indonesia Persero is 1.75 times less risky than Waskita Beton. It trades about -0.09 of its potential returns per unit of risk. Waskita Beton Precast is currently generating about -0.15 per unit of risk. If you would invest 403,000 in Semen Indonesia Persero on September 3, 2024 and sell it today you would lose (53,000) from holding Semen Indonesia Persero or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semen Indonesia Persero vs. Waskita Beton Precast
Performance |
| Timeline |
| Semen Indonesia Persero |
| Waskita Beton Precast |
Semen Indonesia and Waskita Beton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Indonesia and Waskita Beton
The main advantage of trading using opposite Semen Indonesia and Waskita Beton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Indonesia position performs unexpectedly, Waskita Beton 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 Waskita Beton will offset losses from the drop in Waskita Beton's long position.| Semen Indonesia vs. Indocement Tunggal Prakarsa | Semen Indonesia vs. United Tractors Tbk | Semen Indonesia vs. Jasa Marga Tbk | Semen Indonesia vs. PT Indofood Sukses |
| Waskita Beton vs. Timah Persero Tbk | Waskita Beton vs. Semen Indonesia Persero | Waskita Beton vs. Mitra Pinasthika Mustika | Waskita Beton vs. Jakarta Int Hotels |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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