Correlation Between Wijaya Karya and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Wijaya Karya and Intanwijaya Internasional 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 Wijaya Karya and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wijaya Karya Bangunan and Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Wijaya Karya and Intanwijaya Internasional 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 Wijaya Karya with a short position of Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wijaya Karya and Intanwijaya Internasional.
Diversification Opportunities for Wijaya Karya and Intanwijaya Internasional
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wijaya and Intanwijaya is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wijaya Karya Bangunan and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Wijaya Karya 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 Wijaya Karya Bangunan are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Wijaya Karya i.e., Wijaya Karya and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Wijaya Karya and Intanwijaya Internasional
Assuming the 90 days trading horizon Wijaya Karya Bangunan is expected to under-perform the Intanwijaya Internasional. In addition to that, Wijaya Karya is 1.01 times more volatile than Intanwijaya Internasional Tbk. It trades about -0.36 of its total potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about -0.13 per unit of volatility. If you would invest 60,000 in Intanwijaya Internasional Tbk on September 4, 2024 and sell it today you would lose (2,500) from holding Intanwijaya Internasional Tbk or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wijaya Karya Bangunan vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Wijaya Karya Bangunan |
| Intanwijaya Internasional |
Wijaya Karya and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wijaya Karya and Intanwijaya Internasional
The main advantage of trading using opposite Wijaya Karya and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wijaya Karya position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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