Correlation Between Wira Global and Indo Oil
Can any of the company-specific risk be diversified away by investing in both Wira Global and Indo Oil 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 Wira Global and Indo Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wira Global Solusi and Indo Oil Perkasa, you can compare the effects of market volatilities on Wira Global and Indo Oil 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 Wira Global with a short position of Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wira Global and Indo Oil.
Diversification Opportunities for Wira Global and Indo Oil
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wira and Indo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wira Global Solusi and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa and Wira Global 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 Wira Global Solusi are associated (or correlated) with Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of Wira Global i.e., Wira Global and Indo Oil go up and down completely randomly.
Pair Corralation between Wira Global and Indo Oil
Assuming the 90 days trading horizon Wira Global Solusi is expected to generate 1.41 times more return on investment than Indo Oil. However, Wira Global is 1.41 times more volatile than Indo Oil Perkasa. It trades about -0.02 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.16 per unit of risk. If you would invest 9,100 in Wira Global Solusi on September 2, 2024 and sell it today you would lose (100.00) from holding Wira Global Solusi or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wira Global Solusi vs. Indo Oil Perkasa
Performance |
| Timeline |
| Wira Global Solusi |
| Indo Oil Perkasa |
Wira Global and Indo Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wira Global and Indo Oil
The main advantage of trading using opposite Wira Global and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wira Global position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil's long position.| Wira Global vs. Trimegah Karya Pratama | Wira Global vs. Global Sukses Solusi | Wira Global vs. Jaya Swarasa Agung | Wira Global vs. RMK Energy PT |
| Indo Oil vs. Inocycle Technology Tbk | Indo Oil vs. Indo Acidatama Tbk | Indo Oil vs. Grand Kartech Tbk | Indo Oil vs. Steel Pipe Industry |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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