Correlation Between Wijaya Karya and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Wijaya Karya and PT Indofood 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 PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wijaya Karya Beton and PT Indofood Sukses, you can compare the effects of market volatilities on Wijaya Karya and PT Indofood 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 PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wijaya Karya and PT Indofood.
Diversification Opportunities for Wijaya Karya and PT Indofood
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wijaya and INDF is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wijaya Karya Beton and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses 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 Beton are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Wijaya Karya i.e., Wijaya Karya and PT Indofood go up and down completely randomly.
Pair Corralation between Wijaya Karya and PT Indofood
Assuming the 90 days trading horizon Wijaya Karya Beton is expected to generate 4.65 times more return on investment than PT Indofood. However, Wijaya Karya is 4.65 times more volatile than PT Indofood Sukses. It trades about 0.02 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.05 per unit of risk. If you would invest 37,600 in Wijaya Karya Beton on August 25, 2024 and sell it today you would lose (6,200) from holding Wijaya Karya Beton or give up 16.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wijaya Karya Beton vs. PT Indofood Sukses
Performance |
| Timeline |
| Wijaya Karya Beton |
| PT Indofood Sukses |
Wijaya Karya and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wijaya Karya and PT Indofood
The main advantage of trading using opposite Wijaya Karya and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wijaya Karya position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Wijaya Karya vs. Samudera Indonesia Tbk | Wijaya Karya vs. Rukun Raharja Tbk | Wijaya Karya vs. PT Temas Tbk | Wijaya Karya vs. Weha Transportasi Indonesia |
| PT Indofood vs. Charoen Pokphand Indonesia | PT Indofood vs. Kalbe Farma Tbk | PT Indofood vs. Indofood Cbp Sukses | PT Indofood vs. Akr Corporindo 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |