Correlation Between Wijaya Karya and Prima Globalindo
Can any of the company-specific risk be diversified away by investing in both Wijaya Karya and Prima Globalindo 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 Prima Globalindo 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 Prima Globalindo Logistik, you can compare the effects of market volatilities on Wijaya Karya and Prima Globalindo 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 Prima Globalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wijaya Karya and Prima Globalindo.
Diversification Opportunities for Wijaya Karya and Prima Globalindo
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wijaya and Prima is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wijaya Karya Bangunan and Prima Globalindo Logistik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Globalindo Logistik 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 Prima Globalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Globalindo Logistik has no effect on the direction of Wijaya Karya i.e., Wijaya Karya and Prima Globalindo go up and down completely randomly.
Pair Corralation between Wijaya Karya and Prima Globalindo
Assuming the 90 days trading horizon Wijaya Karya Bangunan is expected to under-perform the Prima Globalindo. In addition to that, Wijaya Karya is 2.07 times more volatile than Prima Globalindo Logistik. It trades about -0.01 of its total potential returns per unit of risk. Prima Globalindo Logistik is currently generating about 0.04 per unit of volatility. If you would invest 8,924 in Prima Globalindo Logistik on September 12, 2024 and sell it today you would earn a total of 1,576 from holding Prima Globalindo Logistik or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wijaya Karya Bangunan vs. Prima Globalindo Logistik
Performance |
| Timeline |
| Wijaya Karya Bangunan |
| Prima Globalindo Logistik |
Wijaya Karya and Prima Globalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wijaya Karya and Prima Globalindo
The main advantage of trading using opposite Wijaya Karya and Prima Globalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wijaya Karya position performs unexpectedly, Prima Globalindo 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 Prima Globalindo will offset losses from the drop in Prima Globalindo'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 |
| Prima Globalindo vs. Pelita Samudera Shipping | Prima Globalindo vs. Cisadane Sawit Raya | Prima Globalindo vs. Hartadinata Abadi Tbk | Prima Globalindo vs. Mitrabara Adiperdana PT |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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