Correlation Between Wijaya Karya and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Wijaya Karya and PP Presisi 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 PP Presisi 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 PP Presisi Tbk, you can compare the effects of market volatilities on Wijaya Karya and PP Presisi 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 PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wijaya Karya and PP Presisi.
Diversification Opportunities for Wijaya Karya and PP Presisi
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wijaya and PPRE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wijaya Karya Bangunan and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk 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 PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Wijaya Karya i.e., Wijaya Karya and PP Presisi go up and down completely randomly.
Pair Corralation between Wijaya Karya and PP Presisi
Assuming the 90 days trading horizon Wijaya Karya Bangunan is expected to under-perform the PP Presisi. In addition to that, Wijaya Karya is 1.18 times more volatile than PP Presisi Tbk. It trades about -0.2 of its total potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.21 per unit of volatility. If you would invest 6,200 in PP Presisi Tbk on November 3, 2024 and sell it today you would lose (600.00) from holding PP Presisi Tbk or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wijaya Karya Bangunan vs. PP Presisi Tbk
Performance |
| Timeline |
| Wijaya Karya Bangunan |
| PP Presisi Tbk |
Wijaya Karya and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wijaya Karya and PP Presisi
The main advantage of trading using opposite Wijaya Karya and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wijaya Karya position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi'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 |
| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines Tbk |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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