Correlation Between Wir Asia and Adi Sarana
Can any of the company-specific risk be diversified away by investing in both Wir Asia and Adi Sarana 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 Wir Asia and Adi Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wir Asia Tbk and Adi Sarana Armada, you can compare the effects of market volatilities on Wir Asia and Adi Sarana 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 Wir Asia with a short position of Adi Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wir Asia and Adi Sarana.
Diversification Opportunities for Wir Asia and Adi Sarana
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wir and Adi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wir Asia Tbk and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada and Wir Asia 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 Wir Asia Tbk are associated (or correlated) with Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of Wir Asia i.e., Wir Asia and Adi Sarana go up and down completely randomly.
Pair Corralation between Wir Asia and Adi Sarana
Assuming the 90 days trading horizon Wir Asia Tbk is expected to under-perform the Adi Sarana. In addition to that, Wir Asia is 1.2 times more volatile than Adi Sarana Armada. It trades about -0.02 of its total potential returns per unit of risk. Adi Sarana Armada is currently generating about 0.0 per unit of volatility. If you would invest 86,881 in Adi Sarana Armada on August 27, 2024 and sell it today you would lose (14,881) from holding Adi Sarana Armada or give up 17.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wir Asia Tbk vs. Adi Sarana Armada
Performance |
| Timeline |
| Wir Asia Tbk |
| Adi Sarana Armada |
Wir Asia and Adi Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wir Asia and Adi Sarana
The main advantage of trading using opposite Wir Asia and Adi Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wir Asia position performs unexpectedly, Adi Sarana 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 Adi Sarana will offset losses from the drop in Adi Sarana's long position.| Wir Asia vs. Multipolar Technology Tbk | Wir Asia vs. Digital Mediatama Maxima | Wir Asia vs. M Cash Integrasi | Wir Asia vs. NFC Indonesia 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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