Correlation Between Wir Asia and Nanotech Indonesia
Can any of the company-specific risk be diversified away by investing in both Wir Asia and Nanotech Indonesia 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 Nanotech Indonesia 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 Nanotech Indonesia Global, you can compare the effects of market volatilities on Wir Asia and Nanotech Indonesia 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 Nanotech Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wir Asia and Nanotech Indonesia.
Diversification Opportunities for Wir Asia and Nanotech Indonesia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wir and Nanotech is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Wir Asia Tbk and Nanotech Indonesia Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanotech Indonesia Global 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 Nanotech Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanotech Indonesia Global has no effect on the direction of Wir Asia i.e., Wir Asia and Nanotech Indonesia go up and down completely randomly.
Pair Corralation between Wir Asia and Nanotech Indonesia
Assuming the 90 days trading horizon Wir Asia Tbk is expected to generate 1.38 times more return on investment than Nanotech Indonesia. However, Wir Asia is 1.38 times more volatile than Nanotech Indonesia Global. It trades about 0.09 of its potential returns per unit of risk. Nanotech Indonesia Global is currently generating about -0.2 per unit of risk. If you would invest 10,500 in Wir Asia Tbk on December 8, 2024 and sell it today you would earn a total of 1,000.00 from holding Wir Asia Tbk or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wir Asia Tbk vs. Nanotech Indonesia Global
Performance |
| Timeline |
| Wir Asia Tbk |
| Nanotech Indonesia Global |
Wir Asia and Nanotech Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wir Asia and Nanotech Indonesia
The main advantage of trading using opposite Wir Asia and Nanotech Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wir Asia position performs unexpectedly, Nanotech Indonesia 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 Nanotech Indonesia will offset losses from the drop in Nanotech Indonesia's long position.| Wir Asia vs. GoTo Gojek Tokopedia | ||
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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