Correlation Between Urban Jakarta and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Urban Jakarta and Wahana Pronatural 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 Urban Jakarta and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Jakarta Propertindo and Wahana Pronatural, you can compare the effects of market volatilities on Urban Jakarta and Wahana Pronatural 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 Urban Jakarta with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Jakarta and Wahana Pronatural.
Diversification Opportunities for Urban Jakarta and Wahana Pronatural
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Urban and Wahana is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Urban Jakarta Propertindo and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Urban Jakarta 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 Urban Jakarta Propertindo are associated (or correlated) with Wahana Pronatural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Pronatural has no effect on the direction of Urban Jakarta i.e., Urban Jakarta and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Urban Jakarta and Wahana Pronatural
Assuming the 90 days trading horizon Urban Jakarta Propertindo is expected to under-perform the Wahana Pronatural. But the stock apears to be less risky and, when comparing its historical volatility, Urban Jakarta Propertindo is 3.62 times less risky than Wahana Pronatural. The stock trades about -0.08 of its potential returns per unit of risk. The Wahana Pronatural is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 9,300 in Wahana Pronatural on December 3, 2024 and sell it today you would earn a total of 3,700 from holding Wahana Pronatural or generate 39.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Jakarta Propertindo vs. Wahana Pronatural
Performance |
| Timeline |
| Urban Jakarta Propertindo |
| Wahana Pronatural |
Urban Jakarta and Wahana Pronatural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Jakarta and Wahana Pronatural
The main advantage of trading using opposite Urban Jakarta and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Jakarta position performs unexpectedly, Wahana Pronatural 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 Wahana Pronatural will offset losses from the drop in Wahana Pronatural's long position.| Urban Jakarta vs. Pollux Properti Indonesia | ||
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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