Correlation Between Wira Global and Trimegah Karya
Can any of the company-specific risk be diversified away by investing in both Wira Global and Trimegah Karya 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 Trimegah Karya 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 Trimegah Karya Pratama, you can compare the effects of market volatilities on Wira Global and Trimegah Karya 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 Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wira Global and Trimegah Karya.
Diversification Opportunities for Wira Global and Trimegah Karya
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wira and Trimegah is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Wira Global Solusi and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama 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 Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of Wira Global i.e., Wira Global and Trimegah Karya go up and down completely randomly.
Pair Corralation between Wira Global and Trimegah Karya
Assuming the 90 days trading horizon Wira Global Solusi is expected to generate 1.07 times more return on investment than Trimegah Karya. However, Wira Global is 1.07 times more volatile than Trimegah Karya Pratama. It trades about -0.09 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.21 per unit of risk. If you would invest 9,300 in Wira Global Solusi on August 30, 2024 and sell it today you would lose (400.00) from holding Wira Global Solusi or give up 4.3% 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. Trimegah Karya Pratama
Performance |
| Timeline |
| Wira Global Solusi |
| Trimegah Karya Pratama |
Wira Global and Trimegah Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wira Global and Trimegah Karya
The main advantage of trading using opposite Wira Global and Trimegah Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wira Global position performs unexpectedly, Trimegah Karya 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 Trimegah Karya will offset losses from the drop in Trimegah Karya'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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