Correlation Between Visi Media and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Visi Media 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 Visi Media and Wijaya Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visi Media Asia and Wijaya Karya Bangunan, you can compare the effects of market volatilities on Visi Media 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 Visi Media with a short position of Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visi Media and Wijaya Karya.
Diversification Opportunities for Visi Media and Wijaya Karya
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visi and Wijaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visi Media 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 Visi Media 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 Visi Media 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 Visi Media i.e., Visi Media and Wijaya Karya go up and down completely randomly.
Pair Corralation between Visi Media and Wijaya Karya
Assuming the 90 days trading horizon Visi Media Asia is expected to under-perform the Wijaya Karya. But the stock apears to be less risky and, when comparing its historical volatility, Visi Media Asia is 1.02 times less risky than Wijaya Karya. The stock trades about -0.15 of its potential returns per unit of risk. The Wijaya Karya Bangunan is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 15,100 in Wijaya Karya Bangunan on September 3, 2024 and sell it today you would lose (7,700) from holding Wijaya Karya Bangunan or give up 50.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Visi Media Asia vs. Wijaya Karya Bangunan
Performance |
| Timeline |
| Visi Media Asia |
| Wijaya Karya Bangunan |
Visi Media and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visi Media and Wijaya Karya
The main advantage of trading using opposite Visi Media and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visi Media 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.| Visi Media vs. Indosat Tbk | Visi Media vs. Energi Mega Persada | Visi Media vs. Mitra Pinasthika Mustika | Visi Media vs. Jakarta Int Hotels |
| Wijaya Karya vs. Intanwijaya Internasional Tbk | Wijaya Karya vs. Champion Pacific Indonesia | Wijaya Karya vs. Mitra Pinasthika Mustika | Wijaya Karya 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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