Correlation Between Wijaya Karya and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Wijaya Karya and Putra Mandiri 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 Putra Mandiri 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 Putra Mandiri Jembar, you can compare the effects of market volatilities on Wijaya Karya and Putra Mandiri 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 Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wijaya Karya and Putra Mandiri.
Diversification Opportunities for Wijaya Karya and Putra Mandiri
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wijaya and Putra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wijaya Karya Bangunan and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar 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 Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Wijaya Karya i.e., Wijaya Karya and Putra Mandiri go up and down completely randomly.
Pair Corralation between Wijaya Karya and Putra Mandiri
Assuming the 90 days trading horizon Wijaya Karya Bangunan is expected to generate 1.23 times more return on investment than Putra Mandiri. However, Wijaya Karya is 1.23 times more volatile than Putra Mandiri Jembar. It trades about -0.01 of its potential returns per unit of risk. Putra Mandiri Jembar is currently generating about -0.02 per unit of risk. If you would invest 7,883 in Wijaya Karya Bangunan on September 19, 2024 and sell it today you would lose (1,283) from holding Wijaya Karya Bangunan or give up 16.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wijaya Karya Bangunan vs. Putra Mandiri Jembar
Performance |
| Timeline |
| Wijaya Karya Bangunan |
| Putra Mandiri Jembar |
Wijaya Karya and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wijaya Karya and Putra Mandiri
The main advantage of trading using opposite Wijaya Karya and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wijaya Karya position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri's long position.| Wijaya Karya vs. Wijaya Karya Beton | Wijaya Karya vs. Waskita Beton Precast | Wijaya Karya vs. Pembangunan Perumahan PT | Wijaya Karya vs. Puradelta Lestari PT |
| Putra Mandiri vs. MNC Studios International | Putra Mandiri vs. Jaya Sukses Makmur | Putra Mandiri vs. Mitrabara Adiperdana PT | Putra Mandiri vs. PT Multi Garam |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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